This Smart Money article talks about how many banks may start charging extra for debit card use. This seems like a pretty bad idea when there are plenty of close substitues for debit cards (anyone remember when we used cash?). Many of these substitutes come with better incentives anyways. This will likely be a great experiment for us though, as we can see what the price-elasticity of demand for debit card use. With your knowledge on the relationship between price-elasticity and total revenue, what do you expect to happen to these banks total revenues following a price increase?
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