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Pricing ATM Machines

A bank in a medium-sized Midwestern city, Firm X, currently charges $1 per transaction at its ATM's. To determine whether to raise price , the bank managers experimented with a number of higher prices (in 25-cent increments) at selected ATM's. 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?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M946710

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