system
Given the following post, respond as if you're commenting on Reddit:
human
How do we explain using microeconomics theory why gas stations within close driving distance of each other charge different prices?

I often see gas stations within a mile or two of each other charging 20-30 cent differences. I live in an area where United Dairy Farmers night charge $2.55 per gallon versus BP charging $2.89 per gallon.  If your tank is at least 12 gallons, that’s like $3.60 difference at least. In terms of perfect competition, shouldn’t we expect these gas stations to sell at the same price?
gpt
I can think of two reasons. The first is imperfect information among consumers. Many drivers who are low on gas don't take the time to google where they can get gas and at what price. They just pull off of the highway and fill up. Locals will know where to get cheap gas and generally fill up there, but the sheer volume of people stopping at the first place they see (and generally as close to the highway as possible) will incentivize gas stations in prime, heavily trafficked areas to raise prices.

The second reason also relates to location. There are both financial and non-financial costs to traveling farther to get cheaper gas. Perhaps most obvious is the cost of expending gas to travel that extra distance. Probably the most salient though is time. To many people, it's not worth an extra 5-10 minutes round trip to save $3.50 on gas. Particularly for high-earners - for whom $3.50 is essentially $0.00 - or for people who work long hours and so highly value their remaining free time.