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Influences on businessGeneralLegislationProfitInfluences on business

AQA GCSE · Question 02.4 · Influences on business

Read Item B in the case study. Explain one way in which health and safety law might decrease the profits of a business.

How to approach this question

1. Identify a specific action a business must take to comply with health and safety law (e.g., provide training, buy safety equipment). 2. Explain how this action affects the business's finances to decrease profit (e.g., it increases costs).

Full Answer

Health and safety law requires businesses to provide a safe working environment, which may involve buying safety equipment for machinery (1 mark). This purchase represents an increase in the business's costs, which, if revenue remains the same, will lead to a decrease in its profits (1 mark).
Health and safety legislation, such as the Health and Safety at Work Act 1974, places a duty on employers to protect the health, safety, and welfare of their employees. Complying with this law often involves costs, which can reduce profit (Profit = Revenue - Costs). \nExamples of costs:\n- **Providing Personal Protective Equipment (PPE):** Goggles, safety boots, gloves etc.\n- **Training:** Ensuring staff are trained to use equipment safely.\n- **Risk Assessments:** Paying for specialists to assess workplace risks.\n- **Safer Equipment:** Investing in newer, safer machinery.\nThese actions all increase a business's total costs, which in turn reduces profit.

Common mistakes

✗ Just saying "it costs money" without giving a specific example of a health and safety cost.\n✗ Failing to make the explicit link between the increase in costs and the resulting decrease in profit.

Practice the full AQA GCSE Business Paper 1

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