Today’s revision sprint took us right to the beating heart of business economics — how firms juggle costs, revenues, and profits to survive and grow.

🔑 Fixed vs Variable vs Sunk Costs

We drilled into the differences:

• Fixed costs (like insurance, land, or permanent staff salaries) don’t budge when output changes.
• Variable costs (like fuel or packaging) rise and fall with production.
• Sunk costs (think billions sunk into failed R&D in pharma) can’t be recovered, but still shape future decisions.

🏋️ Case Study Spotlight: PureGym

PureGym is a fantastic real-world example: over 420 gyms in 2025, £150m profit last year, and riding a wave of rapid expansion.

• Revenues depend on incomes, competition, and clever pricing (like price discrimination and add-ons).
• Profits fuel growth, reassure investors, and keep staff motivated. They’re also a sign the business is operating efficiently at scale.
• Economies of scale give PureGym the edge — bulk buying equipment, spreading marketing costs, and securing cheaper finance.

📈 Why This Matters for Exams

Examiners love seeing applied knowledge. Whether it’s gyms, EVs, banks, or housing, being able to link the theory to real businesses is gold dust in essays.

👉 Revision tip:

Pick an industry you genuinely enjoy following (gyms, transport, e-vehicles, whatever sparks your interest). Keep a few firms up your sleeve for exam application — it’ll make your essays stand out.