O'Level  &

Being ethical will not always lead to lower prices. Being ethical means that the business can have a better brand image and reputation as ethical businesses attract customers, this will increase their sales as demand rises. They can charge higher prices for being ethical and increase profits. However, being ethical means they will have to buy more expensive raw materials. This could increase their variable costs and reduce their profit margin. In conclusion, being ethical will not always lead to lower profits. The profits earned from the higher prices charged for the ethical product could cover the increased cost of the ethical raw materials after a long period of time. It will still widen the businesses/products profit margin and increase profits as revenue increases.