IBDP Business management final revision 1 question

Answers to question

  1. Business activities specialized in providing services for customers and other businesses such as hospitals , schools and supermarkets
  2. Mainly the two factors of production needed for the business providing CVs might be labour which are the workers will be helping in serving customers and capital in the form of machines such as computers and printers
  3. The first reason is that the demand on the services started to increase in the past years which make it easier for the company to achieve their objectives , The second reason might be the no need for highly complicated extraction of resources activities to provide these services

4. The recession stands for the slowdown of the business activity in a specific country during a specific year , in the periods of recession , the demand for goods and services is low , and too many people are unemployed and willing to provide their efforts for less wages, also , in the period of recession the cost of getting capital to perform the business activity is low

Moreover , if the entrepreneur succeeded in bringing an idea that can provide goods and services at a lower price in the period where people are not willing to spend a lot then the business in this case can still be having a good opportunity to make profits.

On the other side, the business might be facing a problem of falling demand , since consumers ability and willingness to buy is lower , and it also might be hard for the business to sell unless they are providing their products at a remarkably cheaper prices.

In conclusion, the business success in the period of economic recession is based upon the idea of being able to provide their goods and services without raising the price too much so the company must rely on economies of scale in order to be able to continue its activities.