Which of the following describes a situation when a profit must be made?
A Revenue is equal to total costs - AQA - GCSE Business - Question 2 - 2020 - Paper 1
Question 2
Which of the following describes a situation when a profit must be made?
A Revenue is equal to total costs.
B Revenue is higher than fixed costs.
C Total costs ar... show full transcript
Worked Solution & Example Answer:Which of the following describes a situation when a profit must be made?
A Revenue is equal to total costs - AQA - GCSE Business - Question 2 - 2020 - Paper 1
Step 1
A Revenue is equal to total costs.
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Answer
In this scenario, a profit is not made because revenue exactly covers costs. There is no surplus or profit.
Step 2
B Revenue is higher than fixed costs.
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Answer
While this means that revenue exceeds fixed costs, it does not specify the relationship to total costs, hence profit is not guaranteed.
Step 3
C Total costs are higher than revenue.
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Answer
This clearly indicates a loss rather than a profit, as expenses exceed earnings.
Step 4
D Total costs are lower than revenue.
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Answer
This is the correct answer, as it indicates that revenue exceeds total costs, which directly results in a profit.
