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The term compliance costs refers to expenses associated with meeting (A) competitor prices - HSC - SSCE Business Studies - Question 13 - 2015 - Paper 1
Question 13
The term compliance costs refers to expenses associated with meeting (A) competitor prices. (B) legal requirements. (C) consumer demands. (D) supplier constraints.
Worked Solution & Example Answer:The term compliance costs refers to expenses associated with meeting (A) competitor prices - HSC - SSCE Business Studies - Question 13 - 2015 - Paper 1
Step 1
Identify the meaning of compliance costs
Answer
Compliance costs are generally associated with expenses that organizations incur to adhere to laws and regulations. These can include costs related to legal fees, processing paperwork, and the implementation of required systems and protocols.
Step 2
Evaluate the options provided
Answer
Now, let's evaluate the provided options:
- (A) competitor prices: This relates to market pricing strategies and does not pertain to compliance costs.
- (B) legal requirements: This directly relates to compliance costs, as these expenses arise from meeting legal obligations.
- (C) consumer demands: While important for business operations, this does not match the definition of compliance costs.
- (D) supplier constraints: These may impose costs but are not about compliance specifically.
From this evaluation, option (B) legal requirements is the most accurate choice for defining compliance costs.
Step 3