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3. The components of marginal revenue Karim's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Karim initially produced five trucks, but then decided to increase production to six trucks. The following graph gives the demand curve faced by Karim's HookNLadder. As the graph shows, in order to sell the additional fire truck, Karim must lower the price from $160,000 to $120,000 per truck. Notice that Karim gains revenue from the sale of the additional engine, but at the same time, he loses revenue from the initial five engines because they are all sold at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial five engines by selling at $120,000 rather than $160,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $120,000. 220 200 180 Revenue Lost Demand 180 + 140 Revenue Gained 120 X PRICE (Thousands of dollars per fire engine) 100 60 40 20 2 3 5 6 8 9 10 QUANTITY (Fire engines)Karim increase production from 5 to 6 fire engines because the dominates in this scenario. True or False: If alternatively Karim's HookNLadder were a competitive firm and $160,000 were the market price for an engine, increasing production would not affect the price at which the company is able to sell engines. O True O False