PRICE (Thousands of dollars per fire engine)1101009082R 829 RR70Mo10012False3 4S 07QUANTITY (Fire engines)Demand1Revenue LostRevenue Gainedincrease production from 8 to 9 fire engines because theTrue or False: If alternatively Mo's Hook NLadder were a competitive firm and output effect$80,000 to $60,000 would result in a decrease in the production quantity, but price effect otal revenue.O True(C)dominates in this scenario.e market price for an engine, decreasing its price from Mo's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Mo initially produced eight trucks, but then decidedto increase production to nine trucks. The following graph gives the demand curve faced by Mo's HookNLadder. As the graph shows, in order to sell theadditional fire truck, Mo must lower the price from $80,000 to $60,000 per truck. Notice that Mo gains revenue from the sale of the additional engine,but at the same time, he loses revenue from the initial eight 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 eight engines by selling at $60,000 ratherthan $80,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at$60,000.PRICE (Thousands of daars perfeMo2***1101501QUANTITY (Fe engines.Demand.Revenue LostRevenue GanedIncrease production from a to fire engines because the(?)Tru shouldternatively Mo's HookNLadder were a competitive firm and 160,000 were the market price for an engine, decreasing its prire frshould not would result in a decrease in the production quantity, but an increase in totalOthedominates in this scenario,

A perfectly competitive market is a theoretical market body where all companies offer homogeneous…

PRICE (Thousands of dollars per fire engine 110 100 90 80 75 3 889RRS Mo 60 50 2 true O False 3 4 S 0 7 QUANTITY (Fire engines) Demand 1 Revenue Lost increase production from 8 to 9 fire engines because the True or False: If alternatively Mo's HookNladder were a competitive firm and output effect $80,000 to $60,000 would result in a decrease in the production quantity, but price effect Revenue Gained dominates in this scenario. otal revenue. e market price for an engine, decreasing its price from

PRICE (Thousands of dollars per fire engine 110 100 90 80 75 3 889RRS Mo 60 50 2 true O False 3 4 S 0 7 QUANTITY (Fire engines) Demand 1 Revenue Lost increase production from 8 to 9 fire engines because the True or False: If alternatively Mo's HookNladder were a competitive firm and output effect $80,000 to $60,000 would result in a decrease in the production quantity, but price effect Revenue Gained dominates in this scenario. otal revenue. e market price for an engine, decreasing its price from

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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Femi's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Femi Initially produced five trucks, but then decided to increase production to six trucks. The following graph gives the demand curve faced by Femi's HookNLadder. As the graph shows, in order to sell the additional fire truck; Femi must lower the price from $160,000 to $120,000 per truck. Notice that Femi gains revenue from the sale of the additional engine, but at the same time, he loses revenue from the initial five 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 five engines by selling at $120,000 rather than $160,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $120,000. PRICE (Thousands of dollars per fire engine) 8 8 2 2 2 2 8 2 2 2 20 220 200 180 160 140 120 100 60 40 0 2 3…
Asim's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Asim initially produced eight trucks, but then decided to increase production to nine trucks. The following graph gives the demand curve faced by Asim's HookNLadder. As the graph shows, in order to sell the additional fire truck, Asim must lower the price from $80,000 to $40,000 per truck. Notice that Asim gains revenue from the sale of the additional engine, but at the same time, he loses revenue from the initial eight 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 eight engines by selling at $40,000 rather than $80,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $40,000. PRICE (Thousands of dollars per fire engine) 220 Asim 200 180 160 140 120 100 80 60 40 20 0 0 1 True 2 False 4 5…
Jabari's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Jabari initially produced five trucks, but then decided to increase production to six trucks. The following graph gives the demand curve faced by Jabari's HookNLadder. As the graph shows, in order to sell the additional fire truck, Jabari must lower the price from $160,000 to $120,000 per truck. Notice that Jabari gains revenue from the sale of the additional engine, but at the same time, he loses revenue from the initial five 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 five engines by selling at $120,000 rather than $160,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $120,000. PRICE (Thousands of dollars per fire engine) 220 200 180 160 140 120 100 80 60 40 0 Jabari 0 + 1 True…
Jabari's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Jabari initially produced five trucks, but then decided to increase production to six trucks. The following graph gives the demand curve faced by Jabari's HookNLadder. As the graph shows, in order to sell the additional fire truck, Jabari must lower the price from $160,000 to $120,000 per truck. Notice that Jabari gains revenue from the sale of the additional engine, but at the same time, he loses revenue from the initial five 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 five engines by selling at $120,000 rather than $160,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $120,000. PRICE (Thousands of dollars per fire engine) 220 200 180 160 140 120 100 80 60 40 20 Jabari 0 0 1 2 3…
Jabari's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Jabari initially produced four trucks, but then decided to increase production to five trucks. The following graph gives the demand curve faced by Jabari’s HookNLadder. As the graph shows, in order to sell the additional fire truck, Jabari must lower the price from $105,000 to $90,000 per truck. Notice that Jabari 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
Jabari's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Jabari initially produced four trucks, but then decided to increase production to five trucks. The following graph gives the demand curve faced by Jabari's HookNLadder. As the graph shows, in order to sell the additional fire truck, Jabari must lower the price from $105,000 to $90,000 per truck. Notice that Jabari 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. PRICE (Thousands of dollars per fire engine) Jabari 165 150 135 120 105 90 75 60 45 30 15 D 0 True 1…
Edison's Fire Engines is the sole seller of fire engines in the fictional country of Pyrotania. Initially, Edison produced eight fire engines, but he has decided to increase production to nine fire engines. The following graph shows the demand curve Edison faces. As you can see, to sell the additional engine, Edison must lower his price from $80,000 to $60,000 per fire engine. Note that while Edison gains revenue from the additional engine he sells, he also loses revenue from the initial eight engines because he sells them all at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial eight engines by selling at $60,000 rather than $80,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $60,000. 100 90 PRICE (Thousands of dollars per fire engine) 8 80 70 60 50 40 30 10 0 Edison 0 1 O True 2 O False + 6 3 4 5 7 QUANTITY (Fire…
Jabari's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Jabari initially produced eight trucks, but then decided to increase production to nine trucks. The following graph gives the demand curve faced by Jabari's HookNLadder. As the graph shows, in order to sell the additional fire truck, Jabari must lower the price from $80,000 to $40,000 per truck. Notice that Jabari gains revenue from the sale of the additional engine, but at the same time, he loses revenue from the initial eight 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 eight engines by selling at $40,000 rather than $80,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $40,000. PRICE (Thousands of dollars per fire engine) 220 200 180 160 140 120 100 80 60 40 20 0 Jabari 0 1 O…
Charles's Fire Engines is the sole seller of fire engines in the fictional country of Pyrotania. Initially, Charles produced five fire engines, but he has decided to increase production to six fire engines. The following graph shows the demand curve Charles faces. As you can see, to sell the additional engine, Charles must lower his price from $160,000 to $120,000 per fire engine. Note that while Charles gains revenue from the additional engine he sells, he also loses revenue from the initial five engines because he sells them all at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial five engines by selling at $120,000 rather than $160,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $120,000. PRICE (Thousands of dollars per fire engine) 8 8 8 8 8 8 200 180 160 140 120 100 8 8 8 8 60 20 0 1 Demand 3 4 5 6 7 QUANTITY (Fire…
Carlos's Fire Engines is the sole seller of fire engines in the fictional country of Pyrotania. Initially, Carlos produced four fire engines, but he has decided to increase production to five fire engines. The following graph shows the demand curve Carlos faces. As you can see, to sell the additional engine, Carlos must lower his price from $105,000 to $90,000 per fire engine. Note that while Carlos gains revenue from the additional engine he sells, he also loses revenue from the initial four engines because he sells them all 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. PRICE (Thousands of dollars per fire engine) 150 135 - 120 106 60 45 15 0 + Carlos 0 1 True + 2 False Demand + 6 3 4 5 7 QUANTITY (Fire…
Kevin's Fire Engines is the sole seller of fire engines in the fictional country of Pyrotania. Initially, Kevin produced eight fire engines, but he is considering increasing production to nine fire engines. The following graph shows the demand curve Kevin faces. As you can see, to sell the additional engine, Kevin must lower his price from $100,000 to $80,000 per fire engine. Note that although Kevin would gain revenue from the additional engine he sells, he would also lose revenue from the initial eight engines because he would have to sell them all at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial eight engines by selling at $80,000 rather than $100,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $80,000. 200 180 Revenue Lost 160 140 120 Revenue Gained Demand 100 80 60 40 20 3 4 5 6 QUANTITY (Fire engines) 7 9 10…
Sam's Fire Engines is the sole seller of fire engines in the fictional country of Pyrotania. Initially, Sam produced seven fire engines, but he has decided to increase production to eight fire engines. The following graph shows the demand curve Sam faces. As you can see, to sell the additional engine, Sam must lower his price from $100,000 to $50,000 per fire engine. Note that while Sam gains revenue from the additional engine he sells, he also loses revenue from the initial seven engines because he sells them all at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial seven engines by selling at $50,000 rather than $100,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $50,000. 250 225 Revenue Lost 200 175 150 Revenue Gained 125 Demand 100 75 50 25 + 1 2 3 4 5 6 7 8 10 QUANTITY (Fire engines) PRICE (Thousands of dollars per…