Why are banks using more automatic teller machines (ATMs) and employing fewer human tellers? What economic principle is illustrated about resource markets by this example?

What will be an ideal response?

The economic principle is that firms achieve the least-cost combination of inputs when the last dollar spent on each makes the same contribution to total output. This least-cost rule implies that firms will change inputs in response to technological change or changes in input prices. If the marginal product of an ATM machine divided by its price is greater than the marginal product of a human teller divided by its price, then more ATM machines will be employed in the banking sector, especially since ATM machines serve as substitutes for some aspect of human teller work.
Between 1990 and 2000, some 80,000 positions for human tellers were eliminated and many more will lose positions in years to come. The reason for the change is that ATMs are highly productive because a single machine can handle hundreds of transactions daily, and millions of transaction in several years. Human tellers cannot compete with this level of output.