Interpretation of break even diagrams: ● the impact of changes in revenue and costs ● break even level of output ● margin of safety ● profit and loss.
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Demonstrate Question
This question is an explain question. You MUST use the BLT format. An example is below for a different explain question. The structure of your answer should match the example.
Explain an advantage of having limited liability. (3 marks).
One advantage is that you only risk losing the money you invest in the business.
This is because you and your business have separate legal identities
This leads to being more likely to take calculated risks with the business
Therefore having greater returns when those risks are successful
Have a go at your own
Explain one impact on the a business if it decreases its fixed costs.
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Mark Scheme
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