3. ELI5 How are gas dollars priced?

ELI5 How are gas dollars priced?

Each station owner literally just makes up the price. This is based partly on how much the gas costs them, but just as much on how much everyone nearby is charging. If everyone else on the block is charging $2.34, you can't really charge $2.85, even if for some reason their prices go up to $2.50. So they just take a loss for a little while if they have to. As a result, they make very little profit on gasoline, and make most of their money on car repairs and convenience store items.

As for the low income thing, what makes you think they have to charge lower prices in low income areas? It's not like you can drive 100 miles away to buy gas, people will buy from whoever is nearby, there's no reason to lower prices if you are in a low-income area.

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