Production and Cost CHAPTER 12. The average total cost curve for transactions with a human teller is...
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Transcript of Production and Cost CHAPTER 12. The average total cost curve for transactions with a human teller is...
The average total cost curve for transactions with a human teller is ATCT.
The ATM and the Cost of Getting Cash
The average total cost curve for transactions with an ATM is ATCA.
The lowest average total cost for a human teller transaction is $1.07.
The lowest average total cost curve for an ATM transaction is 27 cents.
The long-run average cost curve is LRAC. At Q transactions per month, both methods have the same average total cost.
For a credit union that does fewer than Q transactions per month, its least-cost method is the teller.
For a bank that does more than Q transactions per month, the least-cost method is the ATM.
The ATM and the Cost of Getting Cash