Answer:
Part (a) Should the firm buy the new equipment
The Firm Should not Buy the New Equipment since there is  No Profit ( instead $1000 Profit lost) from this decision and is in a worse off position than before.
Part (b) should the company buy the new equipment and increase the selling price?
The Firm Should Buy the New Equipment since an incremental Profit of $ 1500 is expected from this decision.
Explanation:
Part (a) Should the firm buy the new equipment
                                                  Do Not Buy      Buy New Equipment
                                                         $                                $
Sales                                             30,000                     50,000
Less Variable Cost                       15,000                      30,000
Contribution                                  15,000                      20,000
Less Fixed Costs                          14,000                      20,000
Net Income                                     1,000                           0
The Firm Should not Buy the New Equipment since there is  No Profit ( instead $1000 Profit lost) from this decision and is in a worse off position than before.
Part (b) should the company buy the new equipment and increase the selling price?
                                                  Do Not Buy      Buy New Equipment
                                                         $                                $
Sales                                             30,000                     49,500
Less Variable Cost                       15,000                      27,000
Contribution                                  15,000                     22,500
Less Fixed Costs                          14,000                      20,000
Net Income                                     1,000                        2,500
The Firm Should Buy the New Equipment since an incremental Profit of $ 1500 is expected from this decision.