I was playing around with tsearch before the trainer release, playing around with merchant level as well.
However, having maxed out merchant level/XP does seem to reduce the number of people coming in by the far margin (before : roughly 5-10. after : 3 sprites, 1 trying to buy). Mid-semesters prevent me from testing out with trial-and-error extensively though.
That said. Another problem that took me by surprise was, the customers "level up" too, which increase the amount of money they have to spend. It was bit of a rude awakening when I realized I can't sell any of my higher-end stocks made available with the ubermerchantlevel.