Question 2

5 marks
Content - 2 marks
Application - 3 marks
Content
1 mark - Defines the term competition or describes one way competition can affect a business
2 marks - Defines the term competition and describes one way competition can affect the business or describes two ways competition can affect a business
Application
3 marks - Good application to the case
1-2 marks - Limited application to the case

Possible answers
Competition may mean that Pete loses clients which will mean he makes less profit
Competition may mean Pete has to cut his prices and therefore loses out on profits
Competition may mean Pete has to differentiate his product offering