sacrificing even more profits that may be had by undercutting coca-cola's price? The CEO would be fired.
Really depends on the concrete numbers and the projections. You could be right, I could be right, I am only saying what I've witnessed historically in general. Greed trumps a lot of other fairly rational courses of action.
Markets generally don't follow Econ 101. There are effects beyond first order when it comes to pricing.