‘Ben the Barber’ has set up in a lay by on the A6 near Luton. Having been a hairdresser in a conventional shop he found the overheads getting larger and larger and was struggling to cope. As this video shows he bought a mobile shop and eventually his business has grown.
Using the video these question might be useful:
1. Explain what is meant by the term fixed costs. (2)
2. State two fixed costs ‘Ben the Barber’ would have had to pay when he had a conventional salon in town. (2)
3. Explain what is meant by the term variable costs. (2)
4. State two variable costs ‘Ben the Barber’ has to pay. (2)
5. Other than by price how could ‘Ben the Barber’ compete with conventional salons. Give reasons for your answer. (8)
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