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?