How much additional profit does the bank make

Assignment Help Business Economics
Reference no: EM133128683

Assume that a local bank sells two services, checking accounts and ATM card services. Mr. Donethat is willing to pay $8 a month for the bank to service his checking account and $2 a month for unlimited use of his ATM card. Ms. Beenthere is willing to pay only $5 for a checking account, but is willing to pay $9 for unlimited use of her ATM card. To keep this example simple, assume that the bank can provide each of these services at zero marginal cost.

How much additional profit does the bank make when it switches to use of a tying strategy to price checking account and ATM service?

a. $14

b. $11

c. $7

d. $1

Reference no: EM133128683

Questions Cloud

Compute the free cash flows to the firm : Compute the Free Cash Flows to the Firm (FCF) for the period from year 1 until year 5, including year 5. Explain your answer.
Inspired ethical and moral reasoning : Take a deeper look at your own life and determine which experiences have inspired ethical and moral reasoning. Were there any huge influences in this process?
Distinguish among occupancy rate-capacity and utilization : In the context of hospital care, define and distinguish among occupancy rate, capacity, and utilization.
How medical services are funded in canada : Based on the information given in the Canada Health Act, write a description of how medical services are funded in Canada. Be sure to describe the services cove
How much additional profit does the bank make : How much additional profit does the bank make when it switches to use of a tying strategy to price checking account and ATM service?
Discuss how gdp applies to workplace today : a. Discuss how GDP applies to your workplace today. b. Explain the role of unemployment and its effect on the economy.
Why gdp is an effective measure of living standards : Explain why GDP is an effective measure of living standards. Discuss how quality-of-life measures may be determined and measured.
Misconceptions most people have about inflation : These are some common misconceptions most people have about inflation. Correct the following statements.
Hartal doktor kontrak is a nationwide workers : Hartal Doktor Kontrak (HDK) is a nationwide workers' strike organized by medical officers in Malaysia on 26 July 2021 in protest against the government's contra

Reviews

Write a Review

Business Economics Questions & Answers

  In pure competition when the market price of the product

In pure competition when the market price of the product is initially higher than the minimum average cost of the firms, then:

  Calculate the present worth of the employees salaries

Aerospace contractor have four employees whose combine salaries through the end of this year are$250000. if the contractor expects to give an average raise of 5% each year, calculate the present worth of the employees' salaries over the next 5 years...

  What does this tell us about their relationship

Suppose that you own a co?ee shop, and have estimated demand for co?ee as. What is the own-price elasticity for co?ee? Is co?ee elastic or inelastic? What is the cross-price elasticity between co?ee and scones? What does this tell us about their rela..

  Both companies will choose to introduce the new line

The payoffs matrix of their simultaneous game is below. What is the Nash Equilibrium of this game?

  Airline pricing research

Airline Pricing Research - An introduction should begin the paper with the conclusion demonstrating how the objective was met. Incidentally, this organization

  Do you think it creates more problems that it solves

Are You in Favor of the Social Security Program or Do You Think It Creates More Problems That It Solves?

  Discuss the necessity of the items

Rank them in order of importance and discuss the necessity of the items. How do you believe this company will fund these investments?

  Calculate the expected revenue

Calculate the expected revenue, expected variable costs and expected costs from overbooking.

  Enhance the learning of others in the course

Discuss your greatest takeaways from the video you watched. How does it tie into some of the other course material you dug through this term?

  Explain market fail-externalities

Explain market fail, externalities and optimality in economics.

  Traditional principles of international peacekeeping

350 words please list references How relevant are the traditional principles in the 21st century? What are the three traditional principles of international peacekeeping? Are all three still equally relevant today? Explain why and or why not. Us..

  Production possibilities curves of electric cars

Suppose that the production possibilities curves of electric cars and those with gasoline is arched towards the outside

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd