O-LevelCommerceBusiness enterprise7100/22 · May/June 2017 · Q720 Marks

X Ltd is a private limited company operating a chain of fifty bookshops throughout a country.

(a)(i)The shareholders of X Ltd have limited liability. Explain what is meant by limited liability.[3]
(a)(ii)Explain two other features, apart from limited liability, of a private limited company.[4]
(b)(i)State two reasons why advertising is necessary for X Ltd.[2]
(b)(ii)Several of X Ltd's shops are in towns with universities. Recommend the two most suitable types of advertising media to attract students into its shops. Give reasons for your recommendations.[4]
(b)(iii)Name one advertising device that X Ltd could use.[1]
(c)The business is facing increased competition from online bookshops. Discuss the ways X Ltd can compete with the online bookshops. Recommend a suitable course of action.[6]

Mark scheme

Marking points from the official mark scheme (May/June 2017). The mark or mark type is shown in brackets.

[3]
[4] 1 mark for each method up to two methods plus 1 mark for explanation of each method
[2]
[4] 1 mark for each advertising type plus 1 mark for each reason
[1]
[6] Level 2 (4–6 marks) Has discussed ways in which X Ltd can compete with online bookshops and given a reasoned recommendation.
[6] Level 1 (1–3 marks) Has commented on the way(s) of competing with/without a recommendation.

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