A town council owns Riverlink Buses. The business runs routes to schools, hospitals and villages where passenger numbers are low. Some routes make a loss, b...
Question 1 Report
A town council owns Riverlink Buses. The business runs routes to schools, hospitals and villages where passenger numbers are low. Some routes make a loss, but the council believes that people need reliable transport. The council has set an objective to improve access for customers rather than to maximise profit.
(a) Identify the sector of the economy in which Riverlink Buses operates. [1]
(b) Which group owns this business? [1]
(c) Explain one reason why Riverlink may continue to operate a loss-making route. [2]
Answer Details
(a) Riverlink Buses operates in the tertiary sector, also called the service sector, because it provides transport rather than extracting raw materials or manufacturing goods. [1]
(b) It is owned by the local council, or government, so it is a public-sector business. [1]
(c) Riverlink may continue a loss-making route because it provides transport for people in isolated villages or enables access to essential services such as schools and hospitals. [1] It therefore meets a social need even though fare sales do not cover its costs. [1]
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