Week 9 EOC: Pricing

In most cases, I look for value. This may not always mean the lower price, but it does mean getting my money’s worth. I look at price versus quality and try to calculate what value I am receiving. Other times, convenience, location, and attitude take top priority.

For instance, gasoline is an inelastic good. This means that small fluctuations will not change the demand for gas. This is because Americans are reliant on gas for transportation. Unlike Europe, public transportation is not usually available, convenient, or timely. There have been many instances where I have paid more for gasoline than I had to.

Firstly, I will usually pay more for gas that is nearer to my house as opposed to farther away. Location is a deciding factor not only because of the convenience, but because it would end up costing more or the same amount to drive around looking for cheaper gas.
Secondly, I have paid more for gas when going on road trips. Most interstates have gas stations posted at multiple exits along the way. It is more timely to pull off right at the exit than driving further into a town looking for cheaper gas. Most people will relate that time is of key importance when taking road trips.

The third and final reason that I have paid more for gas is that of the actual station. I will sometimes choose to pay more for gasoline based on my attitude/perception of their station. If their station features one hundred flavors of slushies, I’m there. If they have a large beer cave, it’s the same thing. On the contrary, if I walk in and the man behind the counter looks as though he has just escaped from a mental institute, I may decide, in the name of safety, to pay more for gasoline elsewhere.