decided to increase production to five 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 $105,000 to $90,000 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 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) Femi 165 150 135 120 105 90 75 60 45 30 15 0 0 1 + 2 Demand 6 3 4 5 QUANTITY (Fire engines) 7 8 9 10 Revenue Lost Revenue Gained increase production from 4 to 5 fire engines because the dominates in this scenario. True or False: If alternatively Femi's HookNLadder were a competitive firm and $105,000 were the market price for an engine, increasing production would not affect the price at which the company is able to sell engines. O True

Question 29

ent-4.docx cetumentGrp Assignment 4. Saved to this Pd v Layout References Mailings A A™ | Aa- | Ap -I A. DA = = = |- |- B demand. daho Review if necessary. Paragraph View ENT Help For a particular video game, the company sells 160 (thousand) copies of the game when the (thousand) copies of the game. price of the game is $55. However, when they change the price to $45, the company sells 240 1 AaBhCcDdi AaBbCcDdi AalbC Đới 1 List Para... Normal 1 No Spac.... Styles a. As part of the process of finding the price elasticity of demand, what is the percent change in quantity using the midpoint method? Round your answer to 4 decimal places ECON 150: Microeconomics b. As part of the process of finding the price elasticity of demand, what is the percent change in price using the midpoint method? Round your answer to 4 decimal places if necessary. C. Using parts a and b, calculate the price elasticity of demand. Round your answer to 2 decimal places if necessary. Four

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