1. Briefly explain why it might be difficult to compare the size of different businesses.
It might be difficult to compare size of businesses because the 4 types of factors, which can help you knowing the size of a business, may be very variable within different sectors of business. There are problems for each factor. The first factor is comparing business size by the number of employees. One of the problems with this is that some large businesses use a lot of machinery. The second sector is comparing business size by value of output and sales. The problem with this is that a firm which sells a small number of expensive goods, can have a higher turnover than another firm which sells a large number of inexpensive goods. The third factor is comparing business size by capital employed. The problem with this is that some businesses might have a lot of workers and very little machinery, like a supermarket company. The fourth and last factor is comparing business size by profit. The problem with this is that businesses that loose a lot of money within a determined time (like General Motors, which lost billions of dollars on 2011, but is still one of the biggest companies in the world) are not the smallest companies.