(1) When chef Paolo prices his speciality 'pizza-n-all' meal at 25, he sells 20 meals a day.

When he prices his pizza meal at 22, he sells 21 meals a day.

A. Suppose Paolo reduces his price from 25 to 22. Explain the impact of the price reduction on the revenue he receives from the first 20 meals he sells.

B. Calculate the additional revenue generated from the additional meals he sells when he lowers his price to 22.

C. Calculate the marginal revenue Paolo receives from the 21st meal. How does that amount relate to the amounts you calculated in (a) and (b)?

D. Is Paolo's decision to reduce his price from 25 to 22 a good one? Why or why not?