Business Studies · May / June 2026 · Paper 12 · Question 4

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BRK is a copper mining business which operates in the primary sector. It is a multinational company (MNC) with mines in 15 countries. As a large business BRK benefits from economies of scale. BRK’s managing director knows the business creates many external costs. He said: ‘I often have to respond to the actions of pressure groups who try to influence BRKqs decisions. However, it is important to recognise that a business can create external benefits.q 4

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4(a)[2]
Define ‘primary sector’. Award 2 marks for a full definition. Award 1 mark for a partial definition.
(Businesses/firms whose business activity) involves the extraction of raw materials [2]
Extracts (and uses) the natural resources (of the earth to produce raw materials used by other businesses). [2]
The sector that generates raw materials (which the secondary sector then uses to make a product) [2]
Partial definition e.g.
Produces/collects/gets/removes raw/natural materials (from the earth) [1]
Sells natural/raw materials [1]
2 1 mark for understanding it involves ‘raw materials/natural resources’. 1 mark for extraction/generates /gather/harvest. Do not award:
Examples
Uses materials to make products (as this is secondary sector)
4(b)[2]
Identify two economies of scale. Award 1 mark per economy of scale (max 2). Two from:
Financial
Purchasing
Managerial
Technical
Marketing 2 Only award the first two responses given. Do not award:
Internal/external economies
Technological/technology/technically
Advertising
Bulk buying
4(c)[4]
Outline two ways pressure groups might try to influence BRK’s decisions. Award 1 mark for each relevant way (max 2). Award 1 mark for each relevant reference to this business (max 2). Points might include:
(Customer) boycotts / persuade customers to stop buying [k] its copper [app]
Raise awareness through website / use social media to engage (young) people / write to newspaper / publish information/leaflets / create negative publicity/ [k] about the multinational company [app]
Write letters/emails to government /lobby politicians/ ask Government to set stricter laws/legal action [k] about the mines [app]
Organise protests/demonstrations/ rally opposition [k] against this primary sector business [app]
Organise petitions [k] about the external costs [app]
Take legal action [k]
Publicity stunts [k]
Write to company/arrange meeting with BRK [k] Other appropriate responses should be credited. 4 To use words from the stem as application, the reference must be appropriate (i.e. make sense) in relation to the point being made. The following words are likely to be appropriate for this question:
Copper
Primary sector
Multinational company
Large business
Mines
15 countries
Economies of scale
External costs Other appropriate examples can be credited. Notes:
To access [k] need to state how they would influence business. Do not award:
Introduce laws / help government make laws
Influence/tell government to take action
Descriptions e.g. walking the streets and shout about BRK
Actions BRK could do in response
4(d)[6]
Explain two advantages to BRK of being a multinational company (MNC). Award 1 mark for identification of each relevant advantage (max 2). Award 1 mark for each relevant reference to this business (max 2). Award 1 mark for each relevant explanation (max 2). Points might include:
Access to skilled labour [k] so more productive/fewer mistakes [an] OR access to cheaper labour [k] which could increase profit margin/lower total costs [an] for this primary sector business [app]
Access to bigger/new markets/sales [k] which can increase revenue/ market share [an] in the 15 countries [app]
Spreads risk [k] as sales falling in one country may be offset by rising sales in another country [an] OR higher costs can be offset by lower costs in other country [an] of copper [app]
Better image/reputation [k] which could allow them to set higher prices / attract more customers [an]
Access to range of raw/natural materials / more land [k] so larger/stable supply available to sell [an]
Avoid import quotas [k] so no/fewer limits on the number of products the business can import into a country [an]
Avoid import tariffs [k] so does not make products more expensive [an]
Access to government grants [k] which could increase cash inflow [an]
Take advantage of lower/favourable tax rates / lower tax liability [k] this helps the business keep more of its profit [an] 6 To use words from the stem as application, the reference must be appropriate (i.e. make sense) in relation to the point being made. The following words are likely to be appropriate for this question:
Copper
Primary sector
Mines
Large business
15 (countries)
Economies of scale
Pressure groups
External costs Other appropriate examples can be credited. Notes:
Access to cheaper (raw) materials is not relevant in this context.
Some points can be [k] or [an] but only award once e.g. increase sales, increase revenue.
The same analysis can be used for different points, but only award once.
Can award ‘avoid trade barriers’ as [k] where no mention of tariffs/quotas.
More market share is [an] only. Do not award:
Less competition
More profit
Access to new technology/ideas
References to manufacturing e.g. lower production costs Guidance
Low(er) transport costs [k] as closer to the market/factories / manufacturing businesses [an] AND/OR which reduces costs [an]
Fewer/less strict regulations [k] which may help lower costs [an] Other appropriate responses should be credited.
4(e)[6]
Explain two external benefits a business might create. Which benefit is likely to be the most important? Justify your answer. Award up to 2 marks for identification of relevant points. Award up to 2 marks for relevant development of points. Award up to 2 marks for justified decision about which external benefit is likely to be the most important. Points might include:
Provide jobs [k] so low(er) rates of unemployment [an] AND/OR provide people with income AND/OR improve standard of living [an]
Help economic growth/increase GDP [k] which can result in additional taxes/tax revenue [an]
Improved infrastructure/better road links [k] improving access for local community/businesses [an]
Pay taxes [k] this increases government revenue [an] AND/OR allowing more spending on public services/schools/healthcare/infrastructure [an]
Provide (new) vaccines/medicines [k] which could prevent diseases / reduce economic harm [an]
Other businesses may move to area to provide services [k] this leads to more jobs / higher income levels/higher living standards [an]
Environmental benefits /protect the environment [k] as reduces pollution/waste/ reduce greenhouse gases [an] OR reduce waste [k] helping protect the environment [an] Other appropriate responses should be credited. 6 This is a generic question so there are no marks for application. To access evaluation must refer to two external benefits. Notes:
Some points can be [k] or [an] but only award once e.g. more jobs, additional tax, infrastructure, economic growth.
Some [an] can be used for different points but only award once.
Lower unemployment is [an] only. Do not award:
Improve workers skills
Increase choice/variety of goods (for customers)
Increase competition
Improve economy as alternative to economic growth Guidance Justification might include: A business could provide jobs [k] so low(er) rates of unemployment [an]. It could also improve the infrastructure [k] making it easier for other businesses travel/transport goods around the local area [an]. Providing jobs is likely to be the most important benefit because people may have additional income to spend which increases sales for other businesses [eval] which is likely to benefit the community more than simply having better/more roads. [eval]

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