(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.

Hint: For this question, think about the question as if you are now selling at 22.00 per unit what would be the revenue earnt from selling an additional unit.

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)?

Hint: The approach and formula to use to address this question is:

Marginal revenue = Change in total revenue / change in total amount output

Use the numbers given and apply them to the formula