Improving Profit - Unit 3

Question 1

What are the 2 areas a business can focus on if they want to improve their profits?

Answer 1

Increasing revenue or lowering costs

Question 2

Improving profit is not easy because…

Answer 2

The techniques can usually affect the performance of the business

Question 3

What’s the equation for working out total revenue?

Answer 3

NUMBER OF PRODUCTS SOLD ❌ AVERAGE PRICE = TOTAL REVENUE

Question 4

What are 2 things a business could do to improve their revenue? (3)

Answer 4

• Improved marketing
• Better products
• Increasing it’s selling price

Question 5

Why does a business have to be careful if they are increasing price?

Answer 5

They have to ensure there will be enough demand to improve profit

Question 6

What’s the equation for total costs?

Answer 6

FIXED COSTS ❌VARIABLE COSTS = TOTAL COSTS

Question 7

Name 1 way a business could reduce it’s costs? (Cutting costs) (2)

Answer 7

• Cutting costs of raw materials, labour or research and development costs
• Cutting it’s marketing