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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 liabilit... 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
Which one of the following is a characteristic of a sole trader?
Answer
The correct answer is B – They have unlimited liability. This characteristic distinguishes sole traders from other business forms. Unlike corporations or partnerships, sole traders are personally liable for all business debts, which means their personal assets can be claimed by creditors.
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 in total costs, use the formula:
ext{Percentage Change} = rac{( ext{New Value} - ext{Old Value})}{ ext{Old Value}} imes 100Substituting in the values:
- Old Value (May): 6000
- New Value (July): 10000
So,
ext{Percentage Change} = rac{(10000 - 6000)}{6000} imes 100 = rac{4000}{6000} imes 100 = 66.67\%The percentage change in total costs between May and July is approximately 66.67%.
Step 3
Explain one reason why new business ideas come about.
Answer
One reason why new business ideas come about is due to changing consumer needs. As society evolves, consumer preferences shift, prompting entrepreneurs to identify and address these needs. For example, advancements in technology can create new demands for products or services, leading to innovative business ideas.
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 to visualize market positioning. By mapping competitors and market segments, businesses can identify gaps in the market, allowing them to target specific audiences effectively. This strategic advantage helps in making informed decisions regarding marketing and product development.
Step 5
Discuss how the decision making of a small business may be affected by increased competition.
Answer
Increased competition can significantly impact a small business's decision-making process. Firstly, it may prompt the business to innovate or improve its products to maintain a competitive edge. Additionally, pricing strategies may need to be adjusted; businesses may lower prices or create promotional offers to attract customers. Furthermore, market research becomes crucial, as understanding competitor behavior can guide better strategic decisions. Ultimately, a small business must continuously adapt to stay relevant in a competitive landscape.