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True or False: If Larry's Fire Engines were a competitive firm instead and $100,000 were the market price for an engine, decreasing its price from $100,000 to $80,000 would result in the same change in
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True or False: If Larry's Fire Engines were a competitive firm instead and $100,000 were the market price for an engine, decreasing its price from $100,000 to $80,000 would result in the same change in production quantity and, thus, total revenue.

User Aron Karmer
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5 votes

Answer:

False

Step-by-step explanation:

This would actually decrease Larry's revenue per engine sold, but the quantity supplied should increase. The change in Larry's total revenue will depend on the price elasticity of demand. Total revenue could either decrease or increase depending on its PED:

User Maddy RS
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