RiverRun Catering serves local families while changing supplier; the case evidence includes gross profit margin of ?2,160, sales of 260 units, and a 25% change in costs or demand. Recommend how the business should respond to Define opportunity cost and apply it to business choices.

Structure the judgement carefully. Apply opportunity cost, business to RiverRun Catering serves local families while changing supplier, then explain how the decision changes capacity utilisation, costs, revenue, cash flow, or stakeholder outcomes. A balanced response considers both the benefit and the risk for managers, uses figures such as ?5,560 or 25%, and reaches a supported judgement based on the business objective.

Start with the business context. This explanation is anchored to Business purpose, goods and services and The purpose and nature of businesses because it links the command word to scenario evidence, commercial reasoning, financial impact, and stakeholder consequences. It also separates revenue and profit, which helps the final judgement stay precise.