Question:

2 A third of the world’s ski resorts are located in the Alps. Prices for holidays in the Alps are relatively
higher than in other regions. The recent pandemic, however, reduced the revenues of many large
and small firms in the tourism industry in the winter season of 2020/2021. Many blamed strict
government regulations for this. However, government intervention also helped many firms to
survive.
(a) State how average revenue is calculated. [2]
(b) Explain two advantages of a large firm. [4]
(c) Analyse the possible causes of higher prices of a product such as ski holidays in the Alps. [6]
(d) Discuss whether or not government intervention is beneficial for firms. [8]

Sample Answers: