You are an aide for the Senate Banking Committee Chairman.He comes to you with a bill that proposes setting limits on what ATM owners can charge nonaccount holders, over and above what banks charge their own customers.Currently, large banks charge noncustomers an average fee of $1.35 per transaction in addition to the fees the customer's own bank imposes.The Senator asks you to look at a proposal that would place a $0.50 cap on the fees ATM owners can charge noncustomer for accessing their money.If this legislation is enacted, what would be the likely effects?
B.Longer lines are likely to develop at ATM machines.Including the value of lost time, the full economic price paid for ATM usage will exceed the current price of $1.35 per transaction.The full economic price is denoted P* in Figure 2-4.Note that the actual magnitude of the shortage and full economic price will depend on the relative slopes of the demand and supply curves.
Figure 2-4

Question

You are an aide for the Senate Banking Committee Chairman.He comes to you with a bill that proposes setting limits on what ATM owners can charge nonaccount holders, over and above what banks charge their own customers.Currently, large banks charge noncustomers an average fee of $1.35 per transaction in addition to the fees the customer's own bank imposes.The Senator asks you to look at a proposal that would place a $0.50 cap on the fees ATM owners can charge noncustomer for accessing their money.If this legislation is enacted, what would be the likely effects?
B.Longer lines are likely to develop at ATM machines.Including the value of lost time, the full economic price paid for ATM usage will exceed the current price of $1.35 per transaction.The full economic price is denoted P* in Figure 2-4.Note that the actual magnitude of the shortage and full economic price will depend on the relative slopes of the demand and supply curves.
  Figure 2-4

Quizplus · Accepted Answer

The Answer of You are an aide for the Senate Banking Committee Chairman.He comes to you with a bill that proposes setting limits on what ATM owners can charge nonaccount holders, over and above what banks charge their own customers.Currently, large banks charge noncustomers an average fee of $1.35 per transaction in addition to the fees the customer's own bank imposes.The Senator asks you to look at a proposal that would place a $0.50 cap on the fees ATM owners can charge noncustomer for accessing their money.If this legislation is enacted, what would be the likely effects?
B.Longer lines are likely to develop at ATM machines.Including the value of lost time, the full economic price paid for ATM usage will exceed the current price of $1.35 per transaction.The full economic price is denoted P* in Figure 2-4.Note that the actual magnitude of the shortage and full economic price will depend on the relative slopes of the demand and supply curves.
  Figure 2-4

You Are an Aide for the Senate Banking Committee Chairman