Do you think BFF should increase its prices? Justify your
answer.
Knowledge [1] – award 1 mark for identification of relevant point(s)
Application [1] – award 1 mark for a relevant reference made to this
business
Analysis [2] – award up to 2 marks for relevant development of
point(s)
Evaluation [2] – justified decision made as to whether BFF should
increase its prices.
Points might include:
• Could increase revenue [k] so more money available to cover
costs [an] such as increase in material costs [app]
• Could lead to fewer customers [k] as higher price could
encourage customers to switch to competitors [an] so difficult
to remain competitive [app]
• They need to increase prices to cover cost [k] because of the
increase in material costs [app]
• Gives an impression of quality [k]
• Keeping prices low may increase market share [k] because it is
a competitive market [app] as lower price attracts customers