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1.4 Production, costs, revenue and profit

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Question 52

After growing into one of the largest operators on its routes, a ferry company is offered a lower interest rate on its £12 million loan. The annual interest rate falls from 6% to 5%, and the full loan is held for the whole year. The company carries 2 million passengers a year.

Calculate the reduction in the company's average cost per passenger carried that results from the lower interest rate.

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Markscheme

1.4 Production, costs, revenue and profit Questions

  1. GCSE
  2. /Economics
  3. /1.4 Production, costs, revenue and profit

138 exam-style questions on AQA GCSE Economics 1.4 Production, costs, revenue and profit, covering 1.4.1a Business objectives, 1.4.1b Types of costs and revenue, 1.4.1c Calculating profit, 1.4.1d Profit as an incentive to produce, 1.4.1e Moral and ethical considerations, 1.4.2a Production versus productivity, 1.4.2b Factors and benefits of productivity, 1.4.3a Economies of scale and business behaviour, 1.4.3b Types of economy of scale, and 1.4.3c Diseconomies of scale. Each one has a worked solution and a mark scheme showing where the marks go.

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