We would like to share one observation with all of you in terms of pricing and consumer psychology. There could be two gas stations right across the street from each other with very different prices. To me, gasoline is a product that is difficult to differentiate. However, you may observe similar amount of traffic going into each of these two gas stations. The price difference is loud and clear as they are displayed on the billboard. For this week's discussion, you can either try to explain this seemingly counter-intuitive phenomenon (shouldn't they all go to the lower priced one?) or you can offer your own observation of any other pricing situations that do not seem to make sense to us consumers.
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