Learning objective
Identify where a business may face a trade-off between sustainability and profit.
Read the explanation, check the common trap, then practise with flashcards and questions.
At a glance
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Topic
Ethical and environmental considerations
Subtopic
Environmental responsibility and sustainability
Study support
Understand this objective
Quick explanation
Identify where a business may face a trade-off between sustainability and profit
- This point belongs to Ethical and environmental considerations, especially Environmental responsibility and sustainability.
- You need to be able to identify where a business may face a trade-off between sustainability and profit.
- The key ideas to know are sustainability.
- 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 Environmental responsibility and sustainability to exam-style questions, flashcards, and revision notes for Ethical and environmental considerations.
Quick student answer
Analyse the potential impact on profit if an independent retailer decides to source all its clothing from suppliers that pay a higher price for certified sustainable materials.
Direct answer
The retailer’s cost of goods sold will rise, reducing gross profit margins. Short‑term cash flow may tighten if the retailer cannot pass the cost onto customers. However, the retailer may attract a niche market of environmentally conscious shoppers, potentially increasing sales volume and offsetting the higher costs over time.
How it works
The analysis identifies the cause (higher supplier price) and effect (lower profit margin). It considers the short‑term negative impact on profit and the possible long‑term benefit of attracting a new customer segment.
Key terms
- trade‑off: A situation where improving one business objective requires compromising another.
Common trap
Assuming sustainability always cuts costs: Many sustainable initiatives involve upfront or ongoing costs that can lower short‑term profit, even though they may offer long‑term benefits.
Related questions
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Flashcard prompts
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Revision notestopic notes
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Open revision notesRelated learning objectives
- Identify where a business may face a trade-off between ethics and profit.
Ethical considerations
- 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