Lesson 3.2.4

3.2.4 Small business survival Quiz: Pearson Edexcel Business, Unit 3

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

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Lesson 3.2.4, Small business survival: 20 multiple choice questions for the Pearson Edexcel Business (9BS0), Unit 3: Business decisions and strategy, written with Revision Ninja.

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The 20 questions

  1. What term describes making a product distinct from competing products in the market?

    • Price discrimination
    • Market segmentation
    • Product differentiation
    • Mass customisation

  2. What term describes a feature that sets a business product apart from its competitors?

    • Break-even point
    • Unique selling point
    • Price elasticity
    • Loss leader

  3. Which channel allows a small business to reach a national market at low cost?

    • Direct mailshots
    • Franchising
    • Television advertising
    • E-commerce

  4. Which key advantage allows a small business to compete effectively against larger rivals?

    • Faster customer adaptation
    • Lower unit costs
    • Mass market dominance
    • Global supply chains

  5. What primary benefit does high-quality personal customer service provide for a small business?

    • Increases factory output
    • Lowers tax liabilities
    • Reduces production costs
    • Builds customer loyalty

  6. What term describes targeting a small, specialised segment of a larger market?

    • Mass marketing
    • Niche marketing
    • Market segmentation
    • Market positioning

  7. What is a primary financial reason for the failure of small businesses?

    • Low overhead costs
    • High profit margins
    • Poor cash flow
    • Excessive liquidity

  8. What feature gives a gluten-free bakery a distinct identity over mass-market rivals?

    • Economies of scale
    • Price leadership
    • Mass distribution
    • Product differentiation

  9. A small firm sells 200 items at 25 pounds each, with a cost of 15 pounds per item. What is its total profit?

    • 1,000 pounds
    • 2,000 pounds
    • 4,000 pounds
    • 3,000 pounds

  10. Which operational advantage allows small firms to quickly adapt to customer requests?

    • Economies of scale
    • High entry barriers
    • Greater flexibility
    • Mass production

  11. Which advantage is a small business least likely to achieve against large competitors?

    • Customer service
    • Operational flexibility
    • Purchasing economies
    • Product differentiation

  12. What is a major risk for a small business operating in a niche market?

    • Market size reduction
    • Excess liquidity
    • Diseconomies of scale
    • High unit costs

  13. Why might a small business with loyal customers still face failure?

    • Strong brand image
    • Poor cash management
    • High product quality
    • Excessive demand

  14. What is a major disadvantage for a small business using e-commerce?

    • Reduced market reach
    • Higher store rent
    • Lower customer access
    • High competition online

  15. Which strategy best helps a small firm survive against large competitors?

    • Mass production
    • Predatory pricing
    • Product differentiation
    • Cost leadership

  16. A small firm has revenue of 80,000 pounds and costs of 60,000 pounds. What is its profit margin?

    • 75%
    • 20%
    • 33%
    • 25%

  17. Why do small firms usually avoid competing on price with large rivals?

    • Lack of flexibility
    • Lower product quality
    • Poorer customer service
    • Higher average costs

  18. What risk does rapid growth pose to a small business's customer service?

    • Lower staff turnover
    • Higher brand loyalty
    • Diluted service quality
    • Increased unit profit

  19. What financial burden is specifically associated with selling goods via e-commerce?

    • Physical security
    • Delivery costs
    • Premises rent
    • In-store displays

  20. What main benefit encourages an owner to keep a business small?

    • Closer customer relationships
    • High risk exposure
    • Economies of scale
    • Market domination

All Pearson Edexcel Business quizzes