3. The components of marginal revenue Jabari's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Jabari initially produced seven trucks, but then decided to increase production to eight 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 $100,000 to $50,000 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 seven 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 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. PRICE (Thousands of dollars per fire engine) 275 250 225 200 175 150 125 100 75 50 25 0 Jabari 0 OO 1 O True 2 O False 3 4 5 6 QUANTITY (Fire engines) 7 Demand 8 9 10 Revenue Lost Revenue Gained increase production from 7 to 8 fire engines because the True or False: If alternatively Jabari's HookNLadder were a competitive firm and $100,000 were the market price for an engine, decreasing its price from $100,000 to $50,000 would result in a decrease in the production quantity, but an increase in total revenue. ? dominates in this scenario.

2. The market for EpiPens Consider the pharmaceutical company Mylan that produces epinephrine injection devices called EpiPens. In the presence of other firms producing substitutes for this good, the price of EpiPens is $150. Now suppose that competitors to Mylan no longer produce epinephrine injection devices, so Mylan now has pricing power in this market. As the economist on staff at Mylan, you are charged with the task of figuring out what your company's new pricing strategy should be. The following graph shows the marginal cost (MC), which is assumed to be constant, and the average total cost (ATC) of Mylan. The graph also shows the demand curve (D) for EpiPens and the marginal revenue curve (MR) once the firm has market power. On the graph, use the grey point (star symbol) to indicate the quantity of EpiPens demanded if Mylan continues to charge $150. Dashed drop lines will automatically extend to both axes. PRICE (Dollars per EpiPen) 1000 900 800 700 600 500 400 300 200 100 0 0 +…

he company can produce the CD with no fixed cost and a variable cost of $5 per CD.a. Find total revenue for quantity equal to 10,000, 20,000, and so on. What is the marginal revenue for each 10,000 increase in the quantity sold?b. What quantity of CDs would maximize profit? What would the price be? What would the profit be?c. If you were Johnny's agent, what recording fee would you advise Johnny to demand from the record company? Why?  Johnny Rockabilly has just finished recording his latest CD. His record company's marketing department determines that the demand for the CD is as follows:PriceNumber of CDs$2410,0002220,0002030,0001840,0001650,0001460,000The company can produce the CD with no fixed cost and a variable cost of $5 per CD.

If Connecting U wants to MAXIMIZE its profits, what should they do? a) Connecting U should maintain their price at $16. Dropping the price would decrease their total revenue and profits. b)Connecting U should drop their price to $14.48. By dropping the price, they would increase their total revenue and profits. is the answer b?   Note- look at the info on the right-hand side of the pic