1. Suppose the government builds a railway in northwest New Territories.
With the aid of a diagram, explain the effect of this new railway on the total revenue of mini-buses operating on the same route. (6 marks)
設政府在新界西北興建一條鐵路。
以圖輔助，解釋該新鐵路對行走相同路線的小巴的總收益有何影響。 (6分)

2. The new railway service is a substitute of minibus service.P S
So the demand for minibus service may decrease. D2 P1
The total revenue decreases from P1Q1 to P2Q2. P2 D1 Q Q2 Q1

3. Suppose there is a drastic increase in sewage charges which affects the total revenue of local restaurants. With the aid of a diagram, explain the condition under which the total revenue would decrease (8 marks)
設排污費大幅調高，因而影響本地酒家的總收益。以圖輔助，解釋在那一種情況下該總收益會下跌。 (8分)

4. - + The sewage charges increases cost. So the supply decreases.
If the demand is elastic, the % increase in price is smaller than the % decrease in quantity demanded.
So the total revenue decreases. P2 - +
new expenditure P1
original expenditure Q1 D Q Q2