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Karim increase production from 4 to 5 fire engines because the O True O False dominates in this scenario. True or False: If alternatively Karim's HookNLadder were a competitive firm and $105,000 were the market price for an engine, decreasing its price from $105,000 to $90,000 would result in the same change in the production quantity and, thus, total revenue.

Karim increase production from 4 to 5 fire engines because the O True O False dominates in this scenario. True or False: If alternatively Karim's HookNLadder were a competitive firm and $105,000 were the market price for an engine, decreasing its price from $105,000 to $90,000 would result in the same change in the production quantity and, thus, total revenue.

Economics: Private and Public Choice (MindTap Course List)
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter23: Price-searcher Markets With Low Entry Barriers
Section: Chapter Questions
Problem 17CQ
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OLANITY F Beverl 2 G Karim increase production from 4 to 5 fire engines because the O True O False dominates in this scenario. True or False: If alternatively Karim's HookNLadder were a competitive firm and $105,000 were the market price for an engine, decreasing its price from $105,000 to $90,000 would result in the same change in the production quantity and, thus, total revenue.
Transcribed Image Text:OLANITY F Beverl 2 G Karim increase production from 4 to 5 fire engines because the O True O False dominates in this scenario. True or False: If alternatively Karim's HookNLadder were a competitive firm and $105,000 were the market price for an engine, decreasing its price from $105,000 to $90,000 would result in the same change in the production quantity and, thus, total revenue.
Attempts Keep the Highest/3 3. The components of marginal revenue Karim's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Karim initially produced four trucks, but then decided to increase production to five trucks. The following graph gives the demand curve faced by Karim's HookNLadder. As the graph shows, in order to sell the additional fire truck, Karim must lower the price from $105,000 to $90,000 per truck. Notice that Karim gains revenue from the sale of the additional engine, but at the same time, he loses revenue from the initial four engines because they are all sold at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial four engines by selling at $90,000 rather than $105,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $90,000.
Transcribed Image Text:Attempts Keep the Highest/3 3. The components of marginal revenue Karim's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Karim initially produced four trucks, but then decided to increase production to five trucks. The following graph gives the demand curve faced by Karim's HookNLadder. As the graph shows, in order to sell the additional fire truck, Karim must lower the price from $105,000 to $90,000 per truck. Notice that Karim gains revenue from the sale of the additional engine, but at the same time, he loses revenue from the initial four engines because they are all sold at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial four engines by selling at $90,000 rather than $105,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $90,000.
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