In 2020, the number of Chinese restaurants in the UK was about 7% lower than in the previous year. This happened because demand for Chinese food was falling and competition from other kinds of food was growing. Some small firms that sell Chinese food are also reluctant to invest in the newest technology because doing so could create opportunity costs.
(a)[2]
Identify two different challenges that small firms face.
(b)[4]
Explain two possible opportunity costs for firms if they buy the latest technology.
(c)[6]
Analyse two reasons why demand for a product such as Chinese food may fall.
(d)[8]
Discuss whether competition does, or does not, harm a firm.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Trouble obtaining finance” …