A charity shop sells second-hand clothing to raise money for medical research. Which statement best describes this organisation's objective?
Question 1 Report
A charity shop sells second-hand clothing to raise money for medical research. Which statement best describes this organisation's objective?
Answer Details
The correct answer is it seeks to generate revenue to fund a social cause rather than to earn private profit.
A charity shop is a type of social enterprise. It operates commercially by selling goods, but its primary objective is to raise funds for a charitable purpose (in this case, medical research) rather than to distribute profit to private owners or shareholders.
The claim that the shop has no costs is incorrect; even with donated goods, the shop faces costs such as rent, utilities, and staff wages. The option about maximising profits for shareholders misidentifies the organisation as a for-profit company. The suggestion that it competes directly with luxury fashion brands is inaccurate, as charity shops typically sell second-hand goods at low prices in a different market segment.
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