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3. (a) Which one of the following is a characteristic of a sole trader? Select one answer: ☐ A They require a business qualification ☐ B They have unlimited liability ☐ C They can sell shares to raise finance ☐ D They do not employ staff Figure 1 shows the total costs for a business between May and July - Edexcel - GCSE Business - Question 3 - 2020 - Paper 1
Question 3
3. (a) Which one of the following is a characteristic of a sole trader? Select one answer: ☐ A They require a business qualification ☐ B They have unlimited liabili... show full transcript
Worked Solution & Example Answer:3. (a) Which one of the following is a characteristic of a sole trader? Select one answer: ☐ A They require a business qualification ☐ B They have unlimited liability ☐ C They can sell shares to raise finance ☐ D They do not employ staff Figure 1 shows the total costs for a business between May and July - Edexcel - GCSE Business - Question 3 - 2020 - Paper 1
Step 1
Step 2
Using the information in Figure 1, calculate the percentage change in total costs between May and July.
Answer
To calculate the percentage change, we use the formula:
ext{Percentage Change} = rac{ ext{New Value} - ext{Old Value}}{ ext{Old Value}} imes 100Assuming the total costs in May were 6000 and in July were 10000:
ext{Percentage Change} = rac{10,000 - 6,000}{6,000} imes 100 = rac{4,000}{6,000} imes 100 = 66.67\ ext{ (approx 60 ext{ %})}Step 3
Explain one reason why new business ideas come about.
Answer
New business ideas may arise because consumers want new products or services that fulfill unmet needs. For example, existing products may not cater to specific preferences or gaps in the market, motivating entrepreneurs to innovate.
Additionally, changes in technology can lead to new opportunities, encouraging business owners to explore different directions.
Step 4
Explain one advantage to a small business of using market mapping.
Answer
One advantage of using market mapping for a small business is that it helps identify gaps in the market. By visualizing market positioning, the business can tailor its products or services to fulfill unmet consumer needs, thereby increasing competitiveness.
Step 5
Discuss how the decision making of a small business may be affected by increased competition.
Answer
Increased competition can lead small businesses to reassess their pricing strategies, product offerings, and marketing tactics.
For instance, to maintain or grow market share, a small business may need to lower prices or enhance product quality. Additionally, the business might invest more in marketing to differentiate itself from competitors, impacting overall operational decisions.
Furthermore, if competition leads to tighter profit margins, small businesses may face constraints that force them to adjust workforce or operational resources, ultimately affecting growth strategies.