Practise growth-factor questions by defining mergers or takeovers and applying finance, risk spreading or economies of scale to business cases.
With reference to the data above and your knowledge of economics, analyse why Bupa may have decided to operate in a wider range of markets.
AO2 (3 marks)/AO3 (3 marks)
AO2 and AO3
- There are several factors that can affect the growth of firms. One of these is the desire to spread risks
- By expanding its product range, Bupa can reduce the risk because it is trading in different markets
- This means that if there is a problem in one market (such as health insurance) it has other areas in which it can continue to trade
- Therefore the range of services, such as hospital and dental treatment, could help to finance the firm and allow it to continue to be successful, if there are problems in other markets
- As Bupa operates in 190 countries, it is likely to encounter uncertainty in the different markets and therefore having a range of services means it is reducing the overall risk to the firm
Level
Mark
Descriptor
0
No rewardable material.
Level 1
1-2
- Demonstrates basic knowledge and understanding by developing relevant points. Limited application of economic terms, concepts, theories and calculations (AO2).
- Information presented will lack selectivity and organisation. Interpretation of economic information will be limited, with a lack of analysis of issues (AO3).
Level 2
3-4
- Demonstrates partial knowledge and understanding by developing relevant points. Partial application of economic terms, concepts, theories and calculations (AO2).
- Information presented will demonstrate some selectivity and organisation. Interpretation of economic information will be good, with some analysis of issues (AO3).
Level 3
5-6
- Demonstrates clear knowledge and understanding by developing relevant points. Appropriate application of economic terms, concepts, theories and calculations (AO2).
- Information presented will demonstrate excellent selectivity and organisation. Interpretation of economic information will be excellent, with a thorough analysis of issues (AO3).
Question
Number
Which one of the following products has a price inelastic
demand?
Mark
Answer