a) Use information from the passage to answer the questions below. Philippine bakeries shrink 'poor man's bread' as inflation bites MANILA: As the war in Ukraine pushes up wheat prices and a weaker peso raises the cost of imported edible oil, many Philippine bakers are shrinking the size of a popular breakfast roll to cope with higher inflation. The slightly sweet and pillowy soft "pandesal", which Filipinos often dunk in coffee or stuff with cheese, used to weigh 35g at Matimyas Bakery, a bread maker in suburban Manila. But as the cost of local and imported ingredients soared in recent months, co-owner Jam Mauleon gradually reduced the size of the roll - known as the "poor man's bread" because it is cheap - to around 25g to avoid raising the 2.50 peso (about US$0.04) price. She feared that even a slight increase would send cash-strapped customers in her neighbourhood to a rival bakery five blocks away. After reducing the number of employees and absorbing higher costs, Mauleon was forced this week to raise the price of a pandesal by 20 per cent to three pesos. As the Philippines lifted COVID-19 restrictions and schoolchildren began returning to the classroom this year, Mauleon had hoped economic conditions for the bakery would improve. Source: www.channelnewsasia.com

(i) Use a factor of supply that is illustrated in the passage to explain the rise in the price of a "pandesal". Support your answer with a market diagram. (4 marks)

(ii) Explain how the "lifting of COVID-19 restrictions" and "schoolchildren returning to the classroom this year" can affect the demand for the pandesal and predict the effect on equilibrium price and quantity. Support your answer with a market diagram. (4 marks)

(iii) The owner of Matimyas Bakery feared that "even a slight increase (in price) would send cash-strapped customers in her neighbourhood to a rival bakery five blocks away". Explain how this suggests that demand for the "pandesal" is price elastic. Use TWO (2) factors of price elasticity of demand to explain the response of the customers to the price increase. (6 marks)

(iv) Based on your answer to part (iii), explain the effect of the price increase on the total revenue of the Matimyas Bakery. Use a diagram to aid your explanation. (6 marks)