(a) (i) Define the term ‘opportunity cost’ (line 8). [2]

Opportunity cost is the next best desired choice.

(ii) Briefly explain the term ‘market research’ (line 5). [3]

Maket research is

(b) (i) Refer to Table 1. Calculate the price elasticity of demand for Candle A when the price is reduced from $5 to $4. [3]

5-4/5 = 0.2

(ii) Explain one benefit to SC from using price elasticity of demand when making pricing decisions. [3]

(c) Analyse why SC’s objectives might change over time. [8]

Objectives are goals a business aims to achieve. SC’s intial goal to ensure survival of the business in her first year in which she has already achieved hence she must come up with a new objective.

SC’s objectives may change overtime due to competition, SC must

(d) Recommend an effective marketing mix for SC’s second year of trading. Justify your answer. [11

(a) (i) Define the term ‘redundancies’ (line 23). [2] (ii) Briefly explain the term ‘joint venture’ (line 22). [3] (b) (i) Refer to Table 2. Calculate the value of X. [2] (ii) Explain the likely impact on MS of the fall in the average price of shoes. [4] (c) Analyse the disadvantages to MS of using a labour intensive production process. [8] (d) Discuss the sources of finance MS could use if the joint venture proposal is agreed. [11