Question

Number 25 A and B

another bunks ATh fees, Time, November 29,1 62 PART 2 The Price System Santa Monica passed this law, Ban from othe une their ATMs: In bank jargon, Bf "out-of-actwork ATM usage In fact, this ban lasted for onilya afier which a judge allowed bank to change fees while awaiting a ful o on the issue. Eventually the ce ban illegal under federal Bt the effect of a full ban on a. In the figare, indicate the new ATM transaction after ban. Also clearly label the shortage. Out-of Supply of ATM transaction Number of ATM tranudie n Santa b. Calculate the exact amount of producer consumer surplus in the out-of-networ ATM market in Santa Monica after the h How large is producer surplas? How lg 25. In the late 1990s, the town of Santa California, made it illegal for banks to charge people ATM fees. As you probably know it's almost always free to use your own bank's ATM but theres usually a fee charged when you use

Answer 1

Answer 25)

a) The new price per out of transaction fee would be S0. You can indicate a line at S0 where Demand would be in the farthest right side and the supply would be the farthest left. The difference between them is the Shortage b) There is a shutdown completely and thus there would be no producer and consumer surplus Price is SO and hence there is no exchange, which means no surplus.