Why do gas stations fluctuate their gas prices? What’s stopping them from charging a high price even when the market is down?
In: Economics
The price fluctuates because they pay a different price for each gas shipment they receive. They can’t gouge the customers because there are gas stations everywhere. E.g., there is a station closest to my house. I’ve never been there. Why? Because there is a gas station across the street that is 10 cents less per gallon. IOW, they can’t gouge their customers because customers always can just go somewhere else.
In fact, it’s a lot easier to price shop with gas than with other things. If you’re in a grocery store, finding out that they charge a lot for milk might not get you to go to a different store because you’re already there and going to a second store may be a waste of time. With gas, you can see the price from your car and you’re already in the car, so you can just keep driving.
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