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why is gas priced at 9 10

Added on February 6, 2017
, Why Do Gas Prices Carry That Extra 9/10 Cent? БDid you see? Б you might ask your spouse or your roommate as you grab your keys to head out on an errand. БOh, I saw it at the BP on the corner for $2. 09,Б he might reply. But heБs probably wrong. He probably saw it at $2. 09 and 9/10 of cent, which actually equates to $2. 10 when all is said and done. But why do gas prices actually have that extra 9/10 fraction at the end, and why does nobody really register it or seem to care? Save on Gas: Research indicates that this practice dates back to the 1930s, when the federal government wanted to get its hands on a fraction of what our ancestors were paying for gasoline. In 1932, the feds implemented a $0. 01 gas tax as a temporary measure during the Great Depression, set to expire in 1934.

But it didnБtБinstead, it was raised by a fraction of a cent. Understandably, gas stations did not want to eat this cost. But they also didnБt want to raise prices drastically; while raising gas by a cent or two might not sound drastic nowadays, it was a pretty steep hike when gas was only 15 cents, according to Ed Jacobsen, who runs the Northwoods Petroleum Museum, in an interview with Marketplace. So instead, the price was raised by 9/10 of a centБand something magical happened. Nobody seemed to notice or care. That magic is simply a matter of marketing. БThey found out that if you priced your gas 1/10 of a cent below a break point, letБs say 40 cents a gallon, Б. 399Б just looked to the public like 39 centsББ remarked Jacobsen.

ItБs a common idea in marketing. Our eyes are attracted to the first, more significant numbers and tend to ignore the subsequent digits. For example, an appliance marketed at $99. 99 is more appealing to our eyes than $100. 00. Logically, we know that they are essentially the same price, but we are much more likely to buy the product that is priced at $99. 99, not because we think saving that one cent is life-changing, but because the marketing illusion is that it is a better deal. This simple bait-and-switch tactic that gas stations use with the 9/10 fraction nearly netted the industry an extra $1. 4 million a year in the US back in 2011, according to Reuters. Need Some New Wheels? So why do include that extra 9/10 of a cent?

Because theyБre making hundreds of millions off of us, and weБre all too blind to notice. Sources:, Why is gasoline always priced with nine tenths of a cent? No other products are sold that way. вBob E. Peel, Stratford, Conn. A shirt that's $9. 99 feels a lot cheaper than $10, doesn't it? Just like that, gas marked $1. 36 9/10 strikes most drivers as a bargain compared with $1. 37 per gallonвeven though gas stations just round up. (Because you can buy fractions of a gallon of gas, they can charge you fractions of a cent. ) Why do all stations do it? Because it works; most folks will never even notice they're paying more. And once one station goes with the cheaper-seeming prices, the others must follow suit to remain competitive. вSally Atkinson

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