True or false: if larry's fire engines were a competitive firm instead and $80,000 were the market price for an engine, decreasing its price from $80,000 to $60,000 would result in a decrease in the production quantity, but an increase in total revenue.

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Business

Braedon

18 June, 04:32

True or false: if larry's fire engines were a competitive firm instead and $80,000 were the market price for an engine, decreasing its price from $80,000 to $60,000 would result in a decrease in the production quantity, but an increase in total revenue.

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Phillip Bullock · Answer 1

False. As the market price for a good falls the demand rises for a product. Hence the the production quantity of a good will rise long with total revenue, as revenue is the summation of costs and profits.