A bank in a medium-sized midwestern city, Firm X, currently charges $1 per transaction at its ATMs.
Question:
A bank in a medium-sized midwestern city, Firm X, currently charges $1 per transaction at its ATMs. To determine whether to raise price, the bank managers experimented with a number of higher prices (in 25-cent increments) at selected ATMs. The marginal cost of an ATM transaction is $0.50.
ATM Fee Usage
$2.00 1,000
$1.75 1,500
$1.50 2,000
$1.25 2,500
$1.00 3,000
What ATM fee should the bank charge?
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ATM Fee Usage Revenue MR MR Trans MC Trans Profit 200 1000 200000 0...View the full answer
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Managerial Economics A Problem-Solving Approach
ISBN: b00btm8fk0
2nd Edition
Authors: Luke M. Froeb, Brain T. Mccann
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