True or False: If Jake's Fire Engines were a competitive firm instead and $75,000 were the market price for an engine, decreasing its price from $75,000 to $50,000 would result in the same change in the production quantity and, thus, total revenue.

False

Explanation:

If Jake decides to increase total sales volume by decreasing the price of its engines, the decrease in price is too large compared to the increase in quantity demanded. The number of engines sold will increase from 5 to 6 (1 more unit) while the price of each engine will decrease from $75,000 to $50,000.

In this scenario, engines are price inelastic:

PED = % change in quantity demanded / % change in price = [(6 - 5) / 5] / [($50,000 - $75,000) / $75,000] = (1 / 5) / ($25,000 / $75,000) = 0.2 / 0.33 = 0.6

when PED is less than 1, the demand is inelastic. This means that a decrease in price will result in a smaller proportional increase in quantity demanded.

the investment was $14,174.196

explanation:

a lump sum means that the father of the example made one deposit and leave it be.

we need to know the value of a capital that generated at 4.05% per year during 28 years the sum of $48,613.24

now clearing the formula to solve for capital we got:

and we reach the answer investment = $14,174.20