Welcome to Accenture, we are happy to have you join our public sector consulting arm. The Senate Banking Committee is considering a limit placed on what automated teller machine (ATM) owners can charge in terms of usage fees. Currently, the national average ATM fee is $2.50, and the proposed limitation is to be set at $1.50.
After scaling quantities in the millions, we have estimated that the current inverse demand for ATMs can be represented as follows: P=5-1.25Qd, while the estimated inverse supply for ATMs can be represented as follows: P=0.5+Qs.
We have some local representatives that are interested in lobbying against the proposed limitation on ATM fees. So we would like you to thoroughly analyze the impact that the limitation would have on the market, and offer evidence that might sway the Senate Banking Committee to reject the proposed ATM fee limitation. Are there any hidden costs to such a proposal, as it seems the fee reduction would only benefit the customer?