Paper 3 - Edexcel A Level Business
Questions with Verified Answers
Pricing strategy - ANSWERSA plan for the medium to long term where a price is set
with the intention of meeting marketing objectives
Pricing strategy - cost plus pricing - ANSWERSA strategy where the prices is set by
applying a percentage margin to the unit cost. For example, adding 50% to the cost of
producing the product
Pricing strategy - price skimming - ANSWERSA strategy where a business charges a
premium price when the product is first launched to maximise revenue per unit
Pricing strategy - penetration pricing - ANSWERSA strategy where a business offers a
significantly lower price than normal to maximise volume sold and build a loyal
consumer base
Pricing strategy - dynamic pricing - ANSWERSA strategy where a business sets flexible
prices for products based on current market demand
Recruitment - ANSWERSThe process of inviting people to apply for a vacancy in a
business
Selection - ANSWERSThe process of choosing the appropriate new member of staff
Training - ANSWERSThe process of developing skills in workers through specifically
design training programmes
Internal recruitment - ANSWERSRecruiting for a vacancy from within the business
External recruitment - ANSWERSRecruiting for a vacancy from outside of the business
Induction training - ANSWERSThe training programme designed for when an employee
is new to a business
On-the-job training - ANSWERSTraining that is carried out at the place of work by
carrying out the responsibilities of the job
Off-the-job training - ANSWERSTraining that is carried out away from the place of work,
such as through a lecture or college course
, Production capacity - ANSWERSThe measure of how much output it can achieve in a
given time
Capacity utilisation - ANSWERSThe proportion of a business' capacity that is being
used within a specific time period. What percentage of the total capacity was produced?
Spare (excess) capacity - ANSWERSWhere actual output is less than capacity
Excess demand - ANSWERSWhere demand for a business' products or services is
more than their capacity
The economy - ANSWERSThe state of a country or region in terms of the production
and consumption of goods and services and the supply of money
The business cycle - ANSWERSThe cycle that every economy goes through - from
boom to bust and recessions - as GDP changes from one quarter to the next.
GDP - ANSWERSGross Domestic Product, the value of national output in a country.
PESTLE Analysis - ANSWERSAn analytical tool used to analyse the external
environment
Political factors - ANSWERSExternal factors arising from decisions made by
government in policies and regulation
Economic factors - ANSWERSExternal factors arising from changes in the economy
Social factors - ANSWERSExternal factors arising from changes in demographics and
tastes / trends
Technological factors - ANSWERSExternal factors arising from advancements in
technology available to both businesses and consumers
Legal factors - ANSWERSExternal factors arising from changes to laws that affect
businesses and consumers
Environmental factors - ANSWERSExternal factors arising from changes involving
caring for the environment
Interest rates - ANSWERSThe reward for saving and cost of borrowing as a percentage
of the money saved or borrowed.
Exchange rates - ANSWERSThe price of one currency expressed in terms of another
currency
Appreciation of currency - ANSWERSWhere the value of a currency increases
Questions with Verified Answers
Pricing strategy - ANSWERSA plan for the medium to long term where a price is set
with the intention of meeting marketing objectives
Pricing strategy - cost plus pricing - ANSWERSA strategy where the prices is set by
applying a percentage margin to the unit cost. For example, adding 50% to the cost of
producing the product
Pricing strategy - price skimming - ANSWERSA strategy where a business charges a
premium price when the product is first launched to maximise revenue per unit
Pricing strategy - penetration pricing - ANSWERSA strategy where a business offers a
significantly lower price than normal to maximise volume sold and build a loyal
consumer base
Pricing strategy - dynamic pricing - ANSWERSA strategy where a business sets flexible
prices for products based on current market demand
Recruitment - ANSWERSThe process of inviting people to apply for a vacancy in a
business
Selection - ANSWERSThe process of choosing the appropriate new member of staff
Training - ANSWERSThe process of developing skills in workers through specifically
design training programmes
Internal recruitment - ANSWERSRecruiting for a vacancy from within the business
External recruitment - ANSWERSRecruiting for a vacancy from outside of the business
Induction training - ANSWERSThe training programme designed for when an employee
is new to a business
On-the-job training - ANSWERSTraining that is carried out at the place of work by
carrying out the responsibilities of the job
Off-the-job training - ANSWERSTraining that is carried out away from the place of work,
such as through a lecture or college course
, Production capacity - ANSWERSThe measure of how much output it can achieve in a
given time
Capacity utilisation - ANSWERSThe proportion of a business' capacity that is being
used within a specific time period. What percentage of the total capacity was produced?
Spare (excess) capacity - ANSWERSWhere actual output is less than capacity
Excess demand - ANSWERSWhere demand for a business' products or services is
more than their capacity
The economy - ANSWERSThe state of a country or region in terms of the production
and consumption of goods and services and the supply of money
The business cycle - ANSWERSThe cycle that every economy goes through - from
boom to bust and recessions - as GDP changes from one quarter to the next.
GDP - ANSWERSGross Domestic Product, the value of national output in a country.
PESTLE Analysis - ANSWERSAn analytical tool used to analyse the external
environment
Political factors - ANSWERSExternal factors arising from decisions made by
government in policies and regulation
Economic factors - ANSWERSExternal factors arising from changes in the economy
Social factors - ANSWERSExternal factors arising from changes in demographics and
tastes / trends
Technological factors - ANSWERSExternal factors arising from advancements in
technology available to both businesses and consumers
Legal factors - ANSWERSExternal factors arising from changes to laws that affect
businesses and consumers
Environmental factors - ANSWERSExternal factors arising from changes involving
caring for the environment
Interest rates - ANSWERSThe reward for saving and cost of borrowing as a percentage
of the money saved or borrowed.
Exchange rates - ANSWERSThe price of one currency expressed in terms of another
currency
Appreciation of currency - ANSWERSWhere the value of a currency increases
