Which argument against a 15% fee increase to clear the overdraft would be most reasonable?

Which argument against a 15% fee increase to clear the overdraft would be most reasonable?

• A. It would definitely clear the overdraft
• B. It would cause no change to membership
• C. It could cause a drop in membership and not clear overdraft
• D. It would only affect non-core services

Answer: (C)

Price sensitivity and how people respond to price changes are being tested. Increasing a 15% fee to clear the overdraft relies on customers continuing to stay and pay despite the higher cost. In reality, a price hike often prompts members to cut back on use or leave altogether, shrinking the membership base and reducing fee income. If enough members drop out or reduce usage, the expected revenue from the higher fees may not materialize, so the overdraft may not be cleared as hoped. That makes the argument against the plan the most reasonable, because it directly questions whether the increased fees will achieve the intended financial goal given potential changes in behavior. The other viewpoints are less plausible because they assume certainty (that the overdraft would definitely be cleared), no reaction from members (which pricing changes typically provoke), or only non-core effects (pricing can influence overall demand, not just peripheral services).

Price sensitivity and how people respond to price changes are being tested. Increasing a 15% fee to clear the overdraft relies on customers continuing to stay and pay despite the higher cost. In reality, a price hike often prompts members to cut back on use or leave altogether, shrinking the membership base and reducing fee income. If enough members drop out or reduce usage, the expected revenue from the higher fees may not materialize, so the overdraft may not be cleared as hoped. That makes the argument against the plan the most reasonable, because it directly questions whether the increased fees will achieve the intended financial goal given potential changes in behavior. The other viewpoints are less plausible because they assume certainty (that the overdraft would definitely be cleared), no reaction from members (which pricing changes typically provoke), or only non-core effects (pricing can influence overall demand, not just peripheral services).