GAE is a multinational business that makes steel. It employs 2400 workers and operates factories in 4 countries. The business often brings in new technology. Keeping inventory is important. GAE’s directors are considering constructing a new factory and want to find out how legal controls over location could influence this choice. The Managing Director remarked, "The new factory will create many external benefits."
(a)[2]
Define ‘external benefits’ in business terms.
(b)[2]
Identify two ways legal controls over location could influence a business.
(c)[4]
Outline two advantages for GAE of introducing new technology.
(d)[6]
Explain two reasons why holding inventory could matter for GAE.
(e)[6]
Explain two benefits to a business of operating as a multinational company. Which benefit is likely to be the most important? Justify your answer.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Advantages enjoyed by the rest of society other than the business because of business activity” …