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3. The components of marginal revenue Paolo's Fire Engines is the sole selier of fire engines in the fictional country of Pyrotania. Initially, Paolo produced five fire engines, but he has dedided to increase production to six fire engines, The following oraph shows the dernand curve Paolo faces, As you can see, to sell the additional engine, Paolo must lower his price from $160,000 to $120,000 per fire engine. Note that although Paolo gains revenue from the additional engine he sells, he also loses revenue from the initial five engines because he sells them all at the lower price. Use the purple rectangle (diamond symbois) to shade the area representing the revenue lost from the inibli five engines by selling at s120, o00 rather than $160,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from seiling an additional engine at $120,000. (7) Paolo increase production from 5 to 6 fire engines, because revenue gained is than revenue fost in this scenario. True or False: if Paolo's Fire Engines were a competitive firm instead and $160,000 were the market price for an engine, increasing its production would not affect the price at which it can sell engines. True