MindTap - Cengage Learning MindTap- Cengage Learning Arm Wrestle Simulator - Roblox gage.com/static/nb/ui/evo/index.html?deploymentId=48985820043301194889180157&elSBN 9781305387638&id=2105230 CENGAGE | MINDTAP Homework Monopoly Attempts 9 Keep the Hignest/3 2. The components of marginal revenue Mo's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Mo initially produced five trucks, but then decided to increase production to six trucks. The following graph gives the demand curve faced by Mo's HookNLadder. As the graph shows, in order to sell the additional fire truck, Mo must lower the price from $160,000 to $120,000 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 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 40 20 Revenue Lost Demand 0 0 1 2 3 4 5 7 B 9 10 QUANTITY (Fire engines) Revenue Gained Mo increase production from 5 to 6 fire engines because the dominates in this scenario. True or False: If alternatively Mo's HookNLadder were a competitive firm and $160,000 were the market price for an engine, decreasing its price from $160,000 to $120,000 would result in the same change in the production quantity and, thus, total revenue. O True O False Grade It Now Save & Continue Continue without saving

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Mo's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Mo initially produced five trucks, but then decided to increase production to six trucks. The following graph gives the demand curve faced by Mo’s HookNLadder. As the graph shows, in order to sell the additional fire truck, Mo must lower the price from $160,000 to $120,000 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 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.