200180Revenue Lost160140120Revenue Gained100Demand80604020++1357810QUANTITY (Fire engines)Manuelincrease production from 8 to 9 fire engines because thedominates in this scenario.PRICE (Thousands of dollars per fire engine) True or False: If Manuel's Fire Engines were a competitive firm instead and $80,000 were the market price for an engine, decreasing its price from$80,000 to $40,000 would result in a decrease in the production quantity, but an increase in total revenue.TrueFalse

Increasing the production has two effects, i.e., output effect and price effect. There is a need to…

200 180 Revenue Lost 160 140 120 Revenue Gained 100 Demand 80 60 40 20 1 2 3 4 6 7 8 9 10 QUANTITY (Fire engines) Manuel increase production from 8 to 9 fire engines because the dominates in this scenario. PRICE (Thousands of dollars per fire engine)

200 180 Revenue Lost 160 140 120 Revenue Gained 100 Demand 80 60 40 20 1 2 3 4 6 7 8 9 10 QUANTITY (Fire engines) Manuel increase production from 8 to 9 fire engines because the dominates in this scenario. PRICE (Thousands of dollars per fire engine)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

200
180
Revenue Lost
160
140
120
Revenue Gained
100
Demand
80
60
40
20
+
+
1
3
5
7
8
10
QUANTITY (Fire engines)
Manuel
increase production from 8 to 9 fire engines because the
dominates in this scenario.
PRICE (Thousands of dollars per fire engine)

True or False: If Manuel's Fire Engines were a competitive firm instead and $80,000 were the market price for an engine, decreasing its price from
$80,000 to $40,000 would result in a decrease in the production quantity, but an increase in total revenue.
True
False

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