A-level Paper 1, June 2025Markets and Business Behaviour
A-level Paper 1, June 2025, Q1(b)
Refer to the previous diagram. There is a reduction in the demand for pizza. Ceteris paribus, which one of the following will happen to the restaurant’s average revenue and marginal revenue as a result of this change?
Multiple choice1 mark
Context
The diagram shows the cost and revenue curves for a pizza in a popular high street restaurant. The restaurant currently pursues an objective of revenue maximisation.
AAverage revenue and marginal revenue both fall
BAverage revenue and marginal revenue stay the same
CAverage revenue falls and marginal revenue increases
DAverage revenue increases and marginal revenue falls
Original diagram required. See the original question paper for the diagram.