Easy2 marksStructured
AQA GCSE · Question 14.2 · How markets work
Explain one business objective Paul might have.
Explain one business objective Paul might have.
How to approach this question
1. State a valid business objective (e.g., profit maximisation, survival, sales maximisation). 2. Explain what this objective means in the context of Paul's business, using data from the table if possible to support your explanation.
Full Answer
Businesses can have various objectives. A common one is profit maximisation, where the firm tries to achieve the biggest gap between total revenue and total costs. Another could be survival, especially for a new business, where the main goal is just to stay in business (which means at least covering costs). At 15 surfboards, Paul is breaking even (Total Revenue = Total Cost), which could be linked to a survival objective. Sales revenue maximisation would involve producing where total revenue is highest. Based on the table, revenue is still rising at 20 units, so this could also be an objective.
Common mistakes
Simply stating an objective without explaining what it means.
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