Terry runs a small Japanese noodle restaurant in a local district. There are quite a lot of restaurants and fast food shops located nearby.

1. a)Terry always thinks that his Japanese noodle is unique and delicious. It deserves getting a higher price so that he can earn more. Can you explain'whyTerry wants to increase the price to increase hisrevenue'based on your Economics knowledge? Illustrate your explanation with a diagram. (8 marks)
2. b)Two months ago, Terry increased the menu prices of all the food he provides in his restaurant. However, he is disappointed to find that this only leads to a significant drop in the revenue.
3. (i) Explain the reason why the result does not support whatTerry'sdecision of increasing the menu prices. What is the actual demand condition situation faced by Terry. Illustrate your explanation with another diagram. (8 marks)
4. (ii) As Terry wants to increase his total revenue, what is your suggestion? Explain. (4 marks)