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    Pricing ATM Machines

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    Pricing ATM Machines (Simple Pricing)

    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?

    Book:

    Managerial Economics: A Problem Solving Approach
    Authors: Luke M. Froeb and Brian T. McCann
    ISBN-13: 978-0-324-35981-7
    ISBN-10: 0-324-35981-0

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