01 Identify two possible reasons why Ella plans to produce the lights in another country. [2]

[BASEL Moderator]

Ella has just left college and wants to start up her own business. She has designed a new bicycle light with a safety feature not found in any rival products. Ella knows obtaining finance will be difficult. She plans to have the lights produced in another country. Each light will cost $8 to produce. Ella cannot decide whether to use price skimming. She said: ‘I have received orders for 300 lights and I have not even started promoting them’. Ella wants to be a successful entrepreneur.

ELLAS INFORMATION.JPG (29.97 KiB) Viewed 70 times

01 Identify two possible reasons why Ella plans to produce the lights in another country. [2]

Possible KN Points:
• lower costs
• no local factory or capacity to make it
• access to materials
• Fewer restrictions