Cambridge IGCSE Business Studies 0450/12 is the May/June 2026 Paper 1 (Short Answer and Data Response), variant 2. It lasts 1 hour 30 minutes, is worth 80 marks and is sat by every 0450 candidate. You answer all four questions, each built around a short business scenario and worth 20 marks. The parts that decide the grade are the eight 6-mark answers, which carry 48 of the 80 marks. This guide goes through the paper question by question and shows what the official mark scheme gave marks for. The paper and its mark scheme are free on the Tutopiya Learning Portal.

For an overview of both 0450 papers from this series, see IGCSE Business Studies 0450 May/June 2026 past papers: what came up and how it was marked.

0450/12 at a glance

Question	Business and topics	Marks	Pattern
1	APL, mobile phone plc: bonus, reasons for working, external recruitment, leadership styles, plc advantages vs disadvantages	20	2, 2, 4, 6, 6
2	Amina, stationery start-up: entrepreneur, ecommerce, using market research, advertising methods, why businesses stay small	20	2, 2, 4, 6, 6
3	BTV, car maker: current ratio, external users of accounts, quality, flow production, why profit matters	20	2, 2, 4, 6, 6
4	BRK, copper mining MNC: primary sector, economies of scale, pressure groups, advantages of being an MNC, external benefits	20	2, 2, 4, 6, 6
	Total	80

The mark scheme tags each mark as knowledge [k], application [app], analysis [an] or evaluation [eval]. Those tags are the key to self-marking this paper.

Question-by-question walkthrough

Question 1: APL, a mobile phone manufacturer (20 marks)

APL is a public limited company with 20 000 employees in five factories. It pays bonuses, encourages different leadership styles and recruits externally.

• 1(a) Define “bonus” (2 marks): the first mark is for the idea of extra money, the second for why it is paid: as a reward for good work or performance, or for hitting targets. “Additional salary” or “more pay” scored only the first mark. “Good behaviour” instead of good work, “lump sum” and “one-off payment” earned nothing extra.
• 1(b) Two reasons why people work (2 marks): money or a better standard of living, job security, job satisfaction, social contact, esteem or status, reaching your potential, or helping the community. Only the first two answers were marked.
• 1(c) Two advantages of external recruitment (4 marks: 2 [k], 2 [app]): new ideas, skills or experience, a wider choice of applicants, less jealousy among current staff, knowledge brought in from competitors, and not creating a second vacancy inside the business. The listed context words were plc, (mobile) phones, 20 000 employees, factories, five locations and leadership styles. “Lower training costs”, “avoids internal competition” and “higher productivity” were not accepted.
• 1(d) Explain two leadership styles (6 marks: 2 [k], 2 [app], 2 [an]): the [k] mark needs the name of the style (autocratic, democratic or laissez-faire), not a description. The [an] mark explains how the style works or gives an advantage, for example quick decisions and clear direction for 20 000 employees (autocratic), or more ideas and higher motivation when staff are consulted on the phones (democratic). Motivation could count as [app] or [an], but only once. Delegation, disadvantages of a style, and answers about owners rather than managers scored nothing.
• 1(e) Are a plc’s advantages always greater than its disadvantages? (6 marks: 2 [k], 2 [an], 2 [eval]): a generic question, so no application marks. Advantages credited: large amounts of finance from selling shares, limited liability, a separate legal identity, continuity, and status that makes banks and suppliers more willing to lend or give credit. Disadvantages: legal formalities and their cost, publishing accounts for competitors to see, separation of ownership and control, takeover risk, dividends reducing retained profit, and the cost and time of selling shares. To reach the evaluation marks you had to cover at least one advantage and one disadvantage. “Quick way to raise funds”, “easy to get a loan” and points about tax were not credited. The model answer weighed finance for expansion against the time spent on legal formalities and judged the finance more important.

Question 2: Amina, a stationery start-up (20 marks)

Amina is an entrepreneur starting a business selling pens and paper online. She has market research results and is choosing how to advertise.

• 2(a) Define “entrepreneur” (2 marks): one mark for starting or setting up a new business, one for taking the risk, combining the factors of production or a named enterprise skill such as initiative. “Manages” or “runs” a business was not enough, and a definition of a sole trader scored nothing.
• 2(b) Define “ecommerce” (2 marks): one mark for the internet, online, websites or social media; one for buying or selling goods or services. “Using technology” alone, or “uses technology to sell”, was not credited.
• 2(c) Two ways to use market research results (4 marks: 2 [k], 2 [app]): identify customer needs or a gap in the market, judge demand or market size, segment the market or find the target market, set the price, choose the promotion method, check the competition, decide where to sell, support a business plan, predict changes in tastes, and reduce the risk of the launch. Context words included entrepreneur, start-up, pens and paper (or stationery), ecommerce and advertising. “Website” or “online” did not count as application in place of ecommerce.
• 2(d) Explain two advertising methods (6 marks: 2 [k], 2 [app], 2 [an]): website or online pop-ups, specialist magazines, social media, leaflets, posters, billboards, radio, newspapers, television, direct mail and email were all accepted. The [an] mark explains how the method works or one advantage, such as reaching many people at low cost or targeting specific customers. “Increases sales”, “raises awareness” or “informs” did not count as analysis, and sales promotion methods (sponsorship, celebrity endorsement, word of mouth) were not advertising methods.
• 2(e) Why a business might remain small, and which reason matters most (6 marks: 2 [k], 2 [an], 2 [eval]): the owner’s choice (keeping control, less stress, less financial risk), limited finance or low profit, a small or niche market, strong competition, wanting a personal service or flexibility, and a lack of skills, staff, land or materials. Low profit was a [k] point only. You needed two valid reasons before any evaluation mark. Poor planning, lack of market research, wrong price or a poor location were rejected. The model answer judged finance most important, because without it the business cannot grow even if the owner wants to.

Question 3: BTV, a car manufacturer (20 marks)

BTV uses flow production in 16 factories. A table gave its December 2025 figures in $ million: non-current assets 700, current assets 90, current liabilities 120, non-current liabilities 300 and profit 900.

• 3(a) Calculate the current ratio (2 marks): current assets ÷ current liabilities = 90 ÷ 120 = 0.75 : 1 (0.75 also accepted). The correct answer with no working still scored 2. 0.8, 3 : 4 and 90 : 120 scored only 1, and so did an answer where 0.75 appeared in the working but not as the final answer.
• 3(b) Two external users of accounts (2 marks): customers, lenders or banks, suppliers, the local community, government, potential investors, and competitors. You had to name the stakeholder, not describe it. Only the first two answers counted.
• 3(c) Four reasons why quality matters (4 marks): reputation, customer loyalty and repeat purchases, higher sales or market share, better customer relationships, less rework and fewer returns, fewer complaints, competitive advantage, higher prices and more added value. Only the first four were marked. Profit, meeting the law, motivation, ethical reasons and “fewer errors” were all rejected.
• 3(d) Explain two disadvantages of flow production (6 marks: 2 [k], 2 [app], 2 [an]): inflexibility and lack of variety (so less able to respond to the car market), lower motivation (lower output or more labour turnover), high inventory and storage needs across 16 sites, one breakdown stopping the whole line, and high set-up costs. Effects on employees alone, such as “boring work”, scored nothing, because the point must be about the effect on BTV. Confusing it with batch production (a fault scrapping a whole batch) was also rejected. Every figure in the table counted as context.
• 3(e) Why profit is important, and which reason matters most (6 marks: 2 [k], 2 [an], 2 [eval]): a source of funds to reinvest with no interest to pay, a measure of success, a reward for risk and a source of dividends, attracting investors, profit-sharing with staff, and deciding whether to keep a product. Motivation could only be credited as analysis, not as a reason in itself. “Ensures survival”, “pays day-to-day costs”, job security, status and a definition of profit were not credited. The model answer chose retained profit as a source of funds, because expansion can raise future profit and returns to owners.

Question 4: BRK, a copper mining multinational (20 marks)

BRK mines copper in 15 countries. It benefits from economies of scale, creates external costs and often responds to pressure groups.

• 4(a) Define “primary sector” (2 marks): one mark for raw materials or natural resources and one for extracting or harvesting them. Examples alone scored nothing, and using materials to make products is the secondary sector.
• 4(b) Two economies of scale (2 marks): financial, purchasing, managerial, technical and marketing. “Bulk buying”, “technological”, “advertising” and “internal/external” were rejected, so use the named categories.
• 4(c) Two ways pressure groups influence BRK (4 marks: 2 [k], 2 [app]): boycotts, social media and publicity campaigns, lobbying government or politicians, protests, petitions, legal action, publicity stunts and meeting the company. The [k] mark had to say how the group would influence the business. “Introduce laws” and actions BRK might take in response did not count.
• 4(d) Explain two advantages of being an MNC (6 marks: 2 [k], 2 [app], 2 [an]): access to skilled or cheaper labour, bigger markets in the 15 countries, spreading risk, a better reputation, access to more raw materials or land, avoiding quotas and tariffs, government grants, lower taxes, lower transport costs and fewer regulations. Access to cheaper raw materials was ruled out in this context. “Less competition”, “more profit”, “access to new technology” and anything about manufacturing costs were rejected.
• 4(e) Two external benefits, and which matters most (6 marks: 2 [k], 2 [an], 2 [eval]): jobs (lower unemployment, higher incomes), economic growth, better infrastructure, taxes that fund public services, new medicines, other businesses moving in, and environmental benefits. Lower unemployment was [an] only. Improving workers’ skills, more choice for customers and more competition were rejected. The model answer picked jobs, because the extra income is spent with other local businesses.

Where the marks are on 0450/12

Part type	Parts	Marks
Definitions, identify and the calculation (2 marks each)	(a) and (b) of every question	16
Outline two / identify four (4 marks each)	1(c), 2(c), 3(c), 4(c)	16
Explain two, in context (6 marks each)	1(d), 2(d), 3(d), 4(d)	24
Justify a judgement, generic (6 marks each)	1(e), 2(e), 3(e), 4(e)	24
Total		80

• Application carries 14 marks: 2 in each of 1(c), 2(c), 4(c) and all four (d) parts. 3(c) is a plain list with none.
• Analysis carries 16 marks (2 in each (d) and each (e)) and evaluation carries 8 (2 in each (e)).
• The (e) parts have no application marks. Writing about BTV or BRK there earns nothing extra; the marks go to two developed points and a reasoned “most important” choice.

How to self-mark 0450/12 with the mark scheme

1. Learn the layout. A slash separates ways of making the same point, a semicolon or bullet separates different points, and words in brackets are not needed for the mark. The guidance column holds the “Do not award” lists and the context words.
2. Tag your own answer. For each (c) and (d), write [k], [app] or [an] beside every sentence. If one sentence carries two tags, check the notes: some points can count as either but only once.
3. Check your context against the list. The scheme lists the stem words that count as application for each part, and says the reference must make sense with your point. A stem word dropped in at random does not score.
4. Mark list questions strictly. For 1(b), 3(b), 4(b) and 3(c), mark only your first two (or four) answers. A repeated point said the other way round earns nothing extra.
5. Check the evaluation gate on every (e). If you discussed only one reason, or only advantages in 1(e), you haven’t met the condition for the evaluation marks. Give [eval] marks only for a reason why your choice matters more, not for repeating it.
6. Log each lost mark as missing knowledge, missing context or a judgement with no reason, and practise that skill next.

Sit 0450/12 as a timed mock

The paper allows 90 minutes for 80 marks, a little over a minute per mark. A workable plan:

Block	Marks	Time
Question 1 (APL)	20	21 minutes
Question 2 (Amina)	20	21 minutes
Question 3 (BTV)	20	21 minutes
Question 4 (BRK)	20	21 minutes
Check, especially 3(a) and the context in each (d)	–	6 minutes

Within each question, aim for about 2 minutes on each 2-mark part, 4 on the 4-mark part and 6 on each 6-mark part. For the (e) parts, write your two points first and leave the last few lines for “this is more important because…”.

Other May/June 2026 0450 papers

• 0450 Paper 22 (Case Study)

Practise and download

• Download 0450/12 and its mark scheme on the Learning Portal →
• All 0450 May/June 2026 papers: overview and marking patterns
• Try a free IGCSE Business Studies quiz

Need help with a 0450 topic? Book a free trial lesson with an IGCSE Business Studies tutor →

Frequently asked questions

What topics were on 0450 Paper 12 May/June 2026? +

Four scenarios: APL, a mobile phone plc (bonuses, why people work, external recruitment, leadership styles, plc advantages and disadvantages); Amina, a stationery start-up (entrepreneur, ecommerce, market research, advertising, why businesses stay small); BTV, a car maker (current ratio, external users of accounts, quality, flow production, profit); and BRK, a copper miner (primary sector, economies of scale, pressure groups, MNCs, external benefits).

How many marks is 0450/12 and how long is it? +

It is out of 80 marks and lasts 1 hour 30 minutes. There are four compulsory questions of 20 marks each, and every question is split 2, 2, 4, 6 and 6.

What was the current ratio answer on 0450/12 2026? +

Current assets of $90 million divided by current liabilities of $120 million gives 0.75 : 1 (0.75 was also accepted) for 2 marks. Rounding to 0.8, or leaving it as 3 : 4 or 90 : 120, earned only 1 mark.

How are the 6-mark part (e) questions marked on 0450/12? +

Each gives 2 knowledge marks, 2 analysis marks and 2 evaluation marks. They are generic, so there are no application marks. You only reach the evaluation marks if you have discussed two reasons or benefits, or, in 1(e), at least one advantage and one disadvantage.

Do I need to use the business context on 0450/12? +

Yes, in parts (c) and (d) of Questions 1, 2 and 4 and in 3(d). Each has 2 application marks, and the mark scheme lists stem words that count, such as mobile phones, 16 factories or copper. The reference must make sense with the point you are making.

Where can I download 0450/12 May/June 2026 and its mark scheme? +

Both are free to download and print on the Tutopiya Learning Portal, on the Cambridge IGCSE Business Studies 0450 past papers page.

Ready to Excel in Your Studies?

Get personalised help from Tutopiya's expert tutors. Whether it's IGCSE, IB, A-Levels, or any other curriculum — we match you with the perfect tutor and your first session is free.

Book Your Free Trial