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 nonpecuniary cost of legislation that would place a $0.75 cap on the fees banks can charge for noncustomer transactions?
Instructions: Enter your responses rounded to the nearest penny (two decimal places).
What would be the full economic price of this legislation?
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