Exam questions

Question 1

Explain one benefit of a business using a market map.

Answer 1

• Identifies POTENTIAL FEATURES of competitors
• Spots GAPS IN THE MARKET
• Business can focus on FEATURES to make themselves DIFFERENT

Question 2

Explain one disadvantage of a sole trader having unlimited liability.

Answer 2

• Increases PERSONAL FINANCIAL risk
• RESPONSIBLE for all LOSSES made by the business
• Have to sell PERSONAL ASSETS to pay off losses

Question 3

Explain one method a business can use to add value to its products

Answer 3

• Business can have USP
• Makes product stand out against competitors
• Customers willing to pay more

Question 4

Explain one disadvantage to a business of operating in a competitive environment

Answer 4

• There will be a lot of competitors
• Businesses might have to start lowering prices
• There will not be a high profit generated