Centre Candidate

Surname
Number Number
First name(s) 2

GCE AS
S25-B510U10-1
B510U10-1

FRIDAY, 16 MAY 2025 – MORNING

BUSINESS – AS component 1
Business Opportunities
1 hour For Examiner’s use only
Maximum Mark
Question
Mark Awarded
1(a) 4
1(b) 2
1(c) 6

B 51 0 U 1 0 1
1(d) 8

01
2(a) 3
2(b)(i) 1
2(b)(ii) 4
2(c) 2
ADDITIONAL MATERIALS 2(d) 6
A calculator. 3(a)(i) 1
3(a)(ii) 1
INSTRUCTIONS TO CANDIDATES
3(a)(iii) 2
Use black ink or black ball-point pen. Do not use gel pen
or correction fluid. 3(b) 6
You may use a pencil for graphs and diagrams only. 3(c) 4
Write your name, centre number and candidate number Total 50
in the spaces at the top of this page.
Write your answers in the spaces provided in this booklet. If you run out of space, use the
additional page(s) at the back of the booklet, taking care to number the question(s) correctly.

INFORMATION FOR CANDIDATES

The number of marks is given in brackets at the end of each question or part-question.
You are reminded of the necessity for good English and orderly presentation in your answers.

JUN25B510U10101 © WJEC CBAC Ltd. VP/JS*(X24-B510U10-1)

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Answer all the questions in the spaces provided.

1. The start-up and ownership of X

X, formally known as Twitter, is an online social networking service created in 2006 by four
entrepreneurs. In 2013, its legal structure changed to a public limited company (plc). The
business has over 20 offices around the world.

In April 2022, Elon Musk, the richest entrepreneur in the world and CEO of Tesla, put in a bid
to buy 100% of the shares of Twitter and become the sole owner. Elon Musk offered to pay
$54.20 for each share. This was 38% higher than the share price of Twitter before Elon Musk’s
bid.

Elon Musk eventually bought Twitter in October 2022, after initially pulling out of the deal in
July 2022.

In 2023 Elon Musk changed the name of Twitter to X. Over 200 million people around the
world use X daily, sharing news, photos and videos. However, some online social networking
sites such as X are banned in some countries.

Figure 1: Twitter share price in $USD during 2022

Elon Musk Elon Musk Elon Musk

offers to buy pulls out of officially buys
55
Twitter buying Twitter and takes control
50 of Twitter

45

40

35

30
Mar 2022 May 2022 Jul 2022 Sep 2022

(a) Describe two characteristics of entrepreneurs. [4]

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In April 2022, Elon Musk offered to pay $54.20 for each share in Twitter. This was 38% higher
than the share price of Twitter before Elon Musk’s bid.

(b) Calculate the share price of Twitter before Elon Musk’s bid. Present your answer to two
decimal places. Show your workings. [2]

(c) Explain two factors Twitter may have considered when locating its offices. [6]

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(d) Discuss the advantages and disadvantages to Twitter of being a public limited
company (plc). [8]

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2. Play2day

Lucy owns and manages a children’s soft play centre

called Play2day. Lucy generates revenue in two ways:

1. Ticket price entry into the soft play centre.

2.
Selling a range of drinks to customers inside the
soft play centre, including cups of squash priced
at 50p each and cans of soft drinks priced at
£1.50 each.

Last month Play2day sold 1350 tickets at a price of

£8 each. Variable cost per unit was £2.10.

(a) Calculate the total contribution made from the ticket sales last month. Show your
workings. [3]

Lucy recently conducted secondary market research. The findings of her research showed
that:

• Cups of squash are classified as an inferior good.

• Cans of soft drinks are classified as a normal good.
• Price elasticity of demand of ticket prices was inelastic.

(b) (i) Define the term price inelastic. [1]

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(ii) Explain what might happen to sales of cups of squash and cans of soft drinks if
customer’s incomes decrease. [4]

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To help Lucy understand and meet customer’s needs further she is considering carrying out
primary market research, using a quota sampling method.

07
(c) Define the meaning of the term quota sampling method. [2]

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(d) Evaluate the usefulness of market research to a business and its customers. [6]

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3. LOL Window Care

Leon and Olaf have been working in the window care industry for several years. After
observing the large amount of profits being made by their employers, Leon and Olaf are now
in the process of planning their own window cleaning business. The business will become a
partnership and will be called LOL Window Care.

Olaf believes that conducting break-even analysis is an important part of the planning process
for a new business. He has created a break-even graph for the first year, which is shown in
Figure 2.

Figure 2: Break-even graph for the first year of LOL Window Care

£100 000
Total revenue
£90 000

£80 000
Cost and Revenues (£)

£70 000
Total cost
£60 000
Fixed cost
£50 000

£40 000

£30 000

£20 000

£10 000

£0
0 200 400 600 800 1000 1200 1400 1600 1800 2000 2200 2400 2600 2800 3000
Number of houses cleaned

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Leon disagrees with Olaf. He is concerned about using break-even analysis to judge the likely
success of their business. Olaf created the break-even graph using the average cleaning price
per house and average variable costs. Leon does not believe this is accurate because the
price and the average variable cost of each cleaning job will depend on the size of the house
and its number of windows.

(a) Leon and Olaf expect to clean 2400 houses in total during the first year of trading.

Using the break-even graph in Figure 2:

(i) Calculate the margin of safety during the first year of trading. [1]

(ii) Calculate the profit for the first year of trading. [1]

(iii) Calculate the average cleaning price per house. Show your workings. [2]

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(b) To what extent do you agree with Olaf’s view that conducting break-even analysis is an
important part of the planning process for LOL Window Care? [6]

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(c) Advise, with supporting reasons, whether Leon and Olaf should turn their plans into
action and start their new window cleaning business. [4]

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Question Additional page, if required. Examiner

number Write the question number(s) in the left-hand margin. only

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number Write the question number(s) in the left-hand margin. only

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