Question: Find the economic value? Edit
Answer: The equilibrium price is $3, but the ceiling price is $1.25.
Notice that,given the shortage of 14 million transactions caused by the ceiling price of $1.25,the average consumer spends an extra 14 minutes traveling to another ATMmachine.
Since the opportunity cost of time is $24 per hour, the non-pecuniaryprice of an ATM transaction is $5.60 (the $24 per hour wage times the fractional hour,14/60, spent searching for another machine).
Thus, the full economic price underthe price ceiling is $6.85 per transaction.
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