econ
From
California to New York, legislative bodies across the United States are
considering eliminating or reducing the surcharges that banks impose on
non-customers who make $12 million in withdrawals from other banks’ ATM
machines. On average, noncustomers earn a wage of $ 24 per hour and pay
ATM fees of $ 3.00 per transaction. It is estimated that banks would be
willing to maintain services for 5 million transactions at $ 1.25 per
transaction, while noncustomers would attempt to conduct 19 million
transactions at that price. Estimates suggest that, for every 1 million
gap between the desired and available transactions, a typical consumer
will have to spend an extra minute traveling to another machine to
withdraw cash. Based on this information
1)
Describe the impact this would have on a manuafaturer who manufactures
ATM machines. Please defend your answer incorporating your knowledge
about supply and demand?
2) If you were the vice president in charge of ATM services, what would you advise the CEO to do with regards to your analysis?
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