Learning objective
Identify where a business may face a trade-off between ethics and profit.
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Flashcards
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Topic
Ethical and environmental considerations
Subtopic
Ethical considerations
Study support
Understand this objective
Quick explanation
Identify where a business may face a trade-off between ethics and profit
- This point belongs to Ethical and environmental considerations, especially Ethical considerations.
- You need to be able to identify where a business may face a trade-off between ethics and profit.
- The key ideas to know are ethics.
- Use the linked flashcards and practice questions to check recall, then practise applying the idea in an exam-style answer.
Key concepts
Why it matters
This objective helps connect Ethical considerations to exam-style questions, flashcards, and revision notes for Ethical and environmental considerations.
Quick student answer
A small retailer sells 100 units at £30 each. Variable cost is £8 per unit and fixed cost is £2000. Calculate the profit and explain how the retailer might face a trade‑off between ethics and profit if it considers using cheaper suppliers.
Direct answer
£200 profit
How it works
Revenue = 100 × £30 = £3000. Variable cost = 100 × £8 = £800. Total cost = £800 + £2000 = £2800. Profit = £3000 – £2800 = £200. The retailer could choose cheaper suppliers to increase profit further, but this may compromise product quality or ethical sourcing, potentially damaging reputation and long‑term sales.
Key terms
- Ethical trade‑off: A decision point where a business must balance ethical considerations against potential profit gains.
Common trap
Confusing profit with revenue: Profit is sales revenue minus total costs; higher sales can increase profit only if costs do not rise proportionally.
Related questions
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Flashcard prompts
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Revision notestopic notes
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Open revision notesRelated learning objectives
- Analyse benefits and drawbacks of ethical behaviour by businesses.
Ethical considerations
- Use relevant examples of businesses behaving ethically.
Ethical considerations
- Explain how businesses and consumers may accept greater environmental responsibility in decision making.
Environmental responsibility and sustainability
- Analyse costs and benefits of environmentally responsible business behaviour.
Environmental responsibility and sustainability
- Identify where a business may face a trade-off between sustainability and profit.
Environmental responsibility and sustainability