Gasoline prices tend to be higher at stations that are just off the freeway than they are at stations in the middle of town. The most likely reason for this is that:
A)freeway exit stations sell a higher quality product.
B)people who buy gas at freeway exit stations tend to have higher search costs.
C)freeway exit stations are more likely to have an attached convenience store.
D)demand for gas at freeway exits is lower than it is in the middle of town.

Question

Quizplus · Accepted Answer

People who buy gas near a freeway exit are likely to be willing to pay for the convenient location so as to avoid having to drive more in an effort to find lower-priced gasoline.

Gasoline Prices Tend to Be Higher at Stations That Are