Hi,
The capacity of the smaller mug is 10.5 fluid ounces
I would say that if a 4 inch mug = 12 fluid ounces, then a 3.5 inch mug = 10.5 fluid ounces.
I concluded this as 4 times 3 equals 12, so if they are similar we can multiply 3.5 by 3. When we do this we get our answer(10.5).
XD