Scenario 16-5 Assume That a Local Bank Sells Two Services, Checking Accounts

question 191

Multiple Choice

Scenario 16-5
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. Assume that the bank can provide each of these services at zero marginal cost.
-Refer to Scenario 16-5.If the bank is able to use tying to price checking account and ATM services,what is the profit-maximizing price to charge for the "tied" good?

• A)$14
• B)$10
• C)$9
• D)$8

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Definitions:

Distribution of Power

The way in which authority, control, and power are allocated and exercised among different groups, individuals, or organizations within a society.

Shifts

Changes or transitions in positions, attitudes, conditions, or periods of time, often indicating a departure from previous states or norms.

Political Action Committees

Organizations that collect funds from members and donate those funds to campaign for or against political candidates, legislation, or policies.

Big Business

Term used to describe large-scale corporate operations, often with significant influence on society and the economy.