Business Studies Multiple Choice Question – 23 May 2023

Alex Chocolate Goodies aims to support its suppliers and their communities by paying above market prices for cocoa beans.

Alex Chocolate Goodies’s aim is most likely to be influenced by which one of the following?

Select ONE answer:

1. exports
2. staff levels
3. demand for products
4. costs of supplies

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct – because exports are more likely to fall than increase. Rolls-Royce goods may become less price competitive internationally due to inflation
2. Not correct – because at times of higher inflation Rolls-Royce would be most likely to decrease staff levels because of falling demand caused by inflation
3. Not correct – because there is likely to be a fall in demand as prices rise due to higher inflation and consumers will have less disposable income and be paying higher prices for vital goods such as food, housing and utilities
4. Correct – Definition of Inflation e.g. is the rate at which the general level of prices for goods and services is rising. Suppliers to Rolls-Royce are likely to face demands for higher wages and face increased raw material costs themselves. This means suppliers are likely to charge Rolls-Royce higher prices to maintain profitability.

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