Question:

3 The number of Chinese restaurants in the UK fell by approximately 7% in 2020 compared to the
year before. Reasons for this include falling demand for Chinese food and increasing competition
from other types of food. Some small firms selling Chinese food are also unwilling to invest in the
latest technology because of the possible opportunity costs.
(a) Identify two challenges facing small firms. [2]
(b) Explain two possible opportunity costs for firms if they invest in the latest technology. [4]
(c) Analyse two causes of a fall in demand for a product such as Chinese food. [6]
(d) Discuss whether or not competition is harmful to a firm. [8]

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