Question

and data response
1 Sasha rents a market stall selling jewellery. She makes most of the jewellery herself but she also buys in items from large manufacturers. Her only other
variable cost is the pay of her sales assistant, who receives a small payment
for each item she sells. Sasha wants to expand her business and she has found
out that there is an empty shop near her home. The fixed costs of the
are three times greater than those of the market stall.
a Define 'variable costs'
.
12]
b Identify two fixed costs that Sasha has.
(2)
c Outline two ways in which Sasha could reduce the break-even level
of sales from her market stall.
d Explain two reasons why large jewellery manufacturers can produce
jewellery at a lower average cost than Sasha can.
[6]
e Would you advise Sasha to close her market stall and open a shop
instead? Justify your answer.
[6]​

Answer 1

Answer:

a. variable cost is the pay of her sales assistant,