Charge for noncustomer transactions

Assignment Help Business Economics

Reference no: EM13861507

From California to New York, legislative bodies across the United States are considering eliminating or reducing the surcharges that banks impose on noncustomers, who make $12 million in withdrawals from other banks’ ATM machines. On average, noncustomers earn a wage of $20 per hour and pay ATM fees of $2.75 per transaction. It is estimated that banks would be willing to maintain services for 5 million transactions at $0.75 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, what would be the no pecuniary cost of legislation that would place a $0.75 cap on the fees banks can charge for noncustomer transactions?

Instructions: Round your answer to the nearest penny (2 decimal places).

What would be the full economic price of this legislation?

Reference no: EM13861507

Questions Cloud

European monetary union : You are advising Great Britain about whether it should join the European monetary union. What arguments can you give in support of joining? With arguments can you give against joining?

A production process exhibits economies of scale : A production process exhibits economies of scale if:

Rules of netiquette : The Rules of Netiquette here: www.albion.com/netiquette/corerules.html. Post your own, original work. Do not copy and paste another student's post and pass it off as your own

The demand for the product of business : The demand for the product of a business is given by q = 50 - 2p. If the price of the product is p = 10 dollars, the revenue is

Charge for noncustomer transactions : From California to New York, legislative bodies across the United States are considering eliminating or reducing the surcharges that banks impose on noncustomers, who make $12 million in withdrawals from other banks’ ATM machines. Based on this infor..

His marginal utility per doughnut : Suppose that Omar’s marginal utility for cups of coffee is constant at 2.5 until per cup no matter how many cups he drinks. On the other hand, his marginal utility per doughnut is 10 for the first doughnut he eats, 9 for the second he eats, 8 for the..

What are wal-marts sourcing and logistics strategies : With China's middle and upper classes so brand-conscious, how will an EDLP strategy be received? What are Wal-Mart's sourcing and logistics strategies in China market

What is the average variable cost function : Suppose the restaurant’s cost function for shrimp balls is C(Q) = 2500 + Q + Q2, and the marginal cost curve is therefore MC(Q) = 1 + 2Q. What is the variable cost function? What is the average variable cost function? What is the average cost functio..

According to wall street journal article : According to a Wall Street Journal article "MCI, in New Phone War Skirmish, Files Suit over AT&T Ad Claims," MCI was upset with AT&T over allegedly false claims that AT&T's service is cheaper than MCI's. Suppose that the typical consumer is a small b..

User Account

All Pages