Question

True or false: if jacques'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 he can sell engines.

Answer 1

This is true. The amount of engines produced will not automatically change the price at which the engines can be sold. In addition, a single company cannot change the overall market price for a good or service. However, raising output could lead to a surplus of stock for that one company in the future.