Sunday, May 22, 2011

Why the difference between gas grades is always 10 cents?

When a gallon of gas cost $1-1.5 the difference between various grades, from unleaded to unleaded plus to premium, was 10 cents, which is around 10%. Now, gas is $4+ and the difference is still 10 cents, which is 2.5%. Looks like there's a very weak, if any, connection between quality and price. Are fuel merchants fooling us with the different prices just to make people pay more for perceived "upgrades"?

tags: control, economics, trade-off

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