Alex moved from Belgium with his family in 2014 to live in England. In 2016 he set up as a sole trader making unique ice creams, which he only sold to local retailers. His business soon prospered and he moved production to a small factory. Local retailers liked his ice cream as it was different. He realised that this could be the opportunity he was looking for to develop his business further.
Alex has seen the price of milk, a commodity he uses, increase.
Which factor is the likely causes of this increase?
Select ONE answer:
- Lower demand for milk
- Milk farmers pay higher wages
- Farmers increase milk production
- Alex’s energy costs increase
Show the workings to arrive at your answer, and explain and justify your reasons:
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This multiple-choice question is suitable for Business Studies KS4 & KS3 classes
The answer is 2 – the other answers would not necessarily explain the increase in milk costs
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