CYN produces a variety of children’s toys. Over the past 10 years, CYN’s revenue has risen by 15% each year. In 2018 CYN’s total revenue reached $900 000. The Managing Director stated: ‘The toy market is becoming increasingly competitive in country J. I never expected the rate of growth to be so high. CYN cannot meet demand and we have decided to stop all marketing promotion for 6 months.’ The Managing Director wants CYN to spend more time developing new products.
Figure 1: Percentage breakdown of CYN’s revenue in 2018. The pie chart shows the following labelled sections: exports 10%, wholesalers 35%, direct to retailers 55%.
(a)[2]
What does the term ‘wholesaler’ refer to?
(b)[2]
Calculate the revenue earned from direct sales to retailers in 2018.
(c)[4]
Identify and explain how each of the following may affect CYN’s exports.
Import quotas being introduced in other countries.
Import tariffs being introduced in other countries.
(d)[6]
Identify and explain one advantage and one disadvantage for CYN of developing new products.
(e)[6]
CYN has chosen to stop all marketing promotion for 6 months. Do you agree with this decision? 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: “A person or business that purchases and stores large amounts of goods from several producers and breaks bulk to provide retailers with smaller amounts” …