3. The components of marginal revenue Nick's Fire Engines is the sole seller of fire engines in the fictional country of Pyrotania. Initially, Nick produced eight fire engines, but he has decided to increase production to nine fire engines. The following graph shows the demand curve Nick faces. As you can see, to sell the additional engine, Nick must lower his price from $80,000 to $50,000 per fire engine. Note that while Nick gains revenue from the additional engine he sells, he also loses revenue from the initial eight 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 inibal eight engines by selling at $60,000 rather than $80,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $60,000 2 100 Demand Revenue Lost 8 8 8 70 Revenue Gained PRICE (Thousands of dolore per fire engne) 8 40 ws 30 10 1 2 3 4 5 5 5 40 QUANTITY (Fire engines) Nick increase production from 8 to 9 fire engines because the dominates in this scenario