Competition. It’s a simple word, yet a very complex
word that covers many angles when it comes to how gasoline prices are
determined. It seems so easy to explain, but don’t let that trick you—it’s
incredibly difficult to explain and adequately understand.
Say you’re on a Sunday afternoon drive, and notice a
gas station near you charging $3.50. Down the road a few miles, that price
could easily be 10 or more cents higher or lower. The question is “how” or
“why” is that? Think of it this way. Are you more likely to get a better deal
on a car if there are two similar car dealers next to each other? Perhaps,
because the dealers are too close. Say there is a third similar car dealer
miles away. Is he going to be at the same level of competition and sell his
cars for the same price as the two dealers next to each other? Likely not. He
may charge more or less. Maybe people don't know there are two other dealers
down the road. Maybe the dealer is almost outside of the city and the land
value isn't as high, so his taxes aren't as high.
These situations do take place at gas stations. And
more factors can impact what a station will charge. Timing can greatly impact
what price a station charges as well! Many motorists fail to realize that the
price a station pays for gasoline changes daily. If one station gets lucky and
buys gas on Monday and the cost goes up Tuesday, the station that bought on
Monday doesn’t necessarily have to raise prices like the station that bought on
Tuesday. Maybe the station that got caught buying for a higher price on Tuesday
will pass that higher cost on by raising its gas price.
Perhaps the difference is what brand the station
is---branded stations usually pay a slightly higher cost for their gasoline. In
return for paying a higher cost, those stations are guaranteed first supply in
case of emergency situations. Independent stations don’t pay as much, but
aren’t guaranteed supply.
While competition sounds easy to understand, there are
always a large number of factors that could influence what one station charges.
Keep in mind how many variables there are next time you fill up.
1.What could be the best title for the passage?
A．How
Competition Impacts Gas Prices
B．Gas Prices Go
Up or Down
C．Competition---a
Very Complex Word
D．We Can’t Stress Enough the Need for Competition
2.The example of car dealers is used to show
_________.
A．car prices
are determined by car dealers
B．location is
an important factor in pricing
C．the quality
of service matters most
D．dealing
strategy should be flexible
3.The gas prices of a station always change partly
because _________.
A．a(chǎn) gas station
always wants to charge more
B．the gasoline
is in great demand
C．the cost of
the gas the station buys varies daily
D．gas is in
greater need on Monday
4.According to the passage, branded stations
_________.
A．spend less
money on their gasoline
B．have more
staff than independent stations
C．charge less
for high quality oil
D．offer a
steady oil supply
