Economics 0455 · IGCSE · Firms’ costs, revenue and objectives
Firms’ costs, revenue and objectives — practice question
One third of the world’s ski resorts are in the Alps. Holiday prices in the Alps are comparatively higher than in other regions. The recent pandemic, however, reduced revenues for many large and small firms in the tourism industry during the winter season of 2020/2021. Many blamed strict government regulations for that. However, government intervention also enabled many firms to survive.
(a)[2]
State the way average revenue is calculated.
(b)[4]
Explain two advantages of a large firm.
(c)[6]
Analyse the possible causes of higher prices for a product such as ski holidays in the Alps.
(d)[8]
Discuss whether or not government intervention is beneficial for firms.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Average revenue is obtained from total revenue” …