15 Do you agree with PLK’s manager that to increase profit it is better to raise prices rather than use cheaper......[6]

[BASEL Moderator]

PLK is a social enterprise which offers training to young people who leave school with no qualifications. The young people are trained by PLK chefs to prepare food which is sold at local markets or sporting events. Choosing the right method of promotion is important. The manager of PLK thinks that to increase profit it is better to raise prices rather than use cheaper food ingredients.

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15 Do you agree with PLK’s manager that to increase profit it is better to raise prices rather than use cheaper
ingredients? Justify your answer. [6]

Possible KN Points :
Raise prices
• could lead to fewer customers (as ‘lower / higher quality’ cannot afford it)
• lower break-even point
• People could be willing to pay sales. higher price as they think it’s for a Do not award cheaper materials might not taste as good / taste bad good cause
• Higher price may suggest better quality

Cheaper ingredients
• will lower the variable cost
• could lower quality

Other factors can be also discussed such as:
• whether demand is price elastic or inelastic
• Level of competition