AQA A Level Business paper 2
Questions with Verified Answers
Extrapolation - ANSWERSthe action of estimating or concluding something by
assuming that existing trends will continue.
Market share calculation - ANSWERSSales of business / total sales in market x 100
Market segmentation - ANSWERSsplitting consumers into groups depending on certain
characteristics (age, gender, lifestyle)
Benefits of market segmentation - ANSWERS- better understanding of customer needs
- better targeting of promotional messages - targeted promotion may be a way to save
money as well as being more effective
Elastic goods of demand - ANSWERS- 1 or more value
- demand is more responsive to change in price
- luxury products such as cars, jewellery
Inelastic goods of demand - ANSWERS- 0-1 value
- demand is less responsive to change in price
- necessities such as milk, fuel, rent
Inelastic demand effect on businesses - ANSWERSallows business to increase prices
of goods
Elastic demand effect on businesses - ANSWERSallows business to decrease price of
goods to increase demand
Factors affecting when it's a good time to launch a new brand - ANSWERS- state of
market (decline or increasing)
- size and value of market
- divides in the market and growing niches
- looking at different demographics
- ethical factors
- competition
- finance - can business penetrate market (may use price skimming or penetration
pricing)
- distribution channels
gross profit margin formula - ANSWERS(gross profit/sales revenue) x 100
Questions with Verified Answers
Extrapolation - ANSWERSthe action of estimating or concluding something by
assuming that existing trends will continue.
Market share calculation - ANSWERSSales of business / total sales in market x 100
Market segmentation - ANSWERSsplitting consumers into groups depending on certain
characteristics (age, gender, lifestyle)
Benefits of market segmentation - ANSWERS- better understanding of customer needs
- better targeting of promotional messages - targeted promotion may be a way to save
money as well as being more effective
Elastic goods of demand - ANSWERS- 1 or more value
- demand is more responsive to change in price
- luxury products such as cars, jewellery
Inelastic goods of demand - ANSWERS- 0-1 value
- demand is less responsive to change in price
- necessities such as milk, fuel, rent
Inelastic demand effect on businesses - ANSWERSallows business to increase prices
of goods
Elastic demand effect on businesses - ANSWERSallows business to decrease price of
goods to increase demand
Factors affecting when it's a good time to launch a new brand - ANSWERS- state of
market (decline or increasing)
- size and value of market
- divides in the market and growing niches
- looking at different demographics
- ethical factors
- competition
- finance - can business penetrate market (may use price skimming or penetration
pricing)
- distribution channels
gross profit margin formula - ANSWERS(gross profit/sales revenue) x 100
