Question

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.

Answer 1

Question:

The question is incomplete. See below the complete question.

Felix's Fire Engines is the sole seller of fire engines in the fictional country of Pyrotania. Initially, Felix produced seven fire engines, but he has decided to increase production to eight fire engines. The following graph shows the demand curve Felix faces. As you can see, to sell the additional engine, Felix must lower his price from $100,000 to $50,000 per fire engine. Note that while Felix 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.

Step-by-step explanation:

Find attached of the diagram for the question asked and the answer.

The area shaded with purple rectangle represent the revenue lost from the initial seven engines for selling at $50,000 instead of $100,000.

Also, the area shaded with green rectangle represent the revenue gained from selling additional engine at $50,000.

Answer 2

Felix shouldn't expand the Production from 7 to 8 units in light of the fact that the value impact commands right now.

Step-by-step explanation:

On the off chance that we accept the offered proclamation to be valid and the cost is diminished from 100,000 to 50,000 as referenced in the announcement and expecting the outcome would be a decline in yield, at that point there would clearly be a reduction in income since cost is cut and the amount sold has gone down.