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Gas stations and other similar businesses are often clustered together due to a concept known as Hotelling's Model of Spatial Competition. This model helps explain why businesses like coffee shops, grocery stores, and restaurants tend to locate near one another rather than being evenly distributed. Using the example of ice cream vendors at a beach, the optimal placement to maximize sales is at the midpoint of the beach, allowing access to the most customers. When competition arises, such as another ice cream cart appearing, the service provider must consider proximity to maintain customer reach. This phenomenon illustrates how similar businesses benefit from being in close proximity to each other.
