Business Studies · Oct / Nov 2019 · Paper 12 · Question 2

Samira owns a successful business selling takeaway fried food. She employs 2 part-time workers. Last year revenue fell for the first time in 10 years. This was because of increased competition from a well-known franchise. To respond to this, Samira could lower her prices, as shown in Table 1. Another option is to start a delivery service. Samira plans to do some market research. She has to decide whether to use secondary research or set up a focus group with some of her customers. Table 1: Price and variable cost information for Samira’s business Current price New price Average price per item $4 $3 Average variable cost per item $2 $2 Forecast average number of 200 300 customers per week

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