An Ordinary Expense I.is Normal, Common, and Accepted Under the Circumstances of the Circumstances

question 14

Multiple Choice

An ordinary expense
I.is normal, common, and accepted under the circumstances of the business community.
II.is an expense commonly incurred in an income-producing activity.
​

• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

---

Definitions:

Effective Collusion

A situation where firms in a market agree to act together instead of competing, often to fix prices or market shares, to maximize their profits.

Marginal Revenue

The additional income gained from selling one more unit of a product or service, crucial in determining the optimal level of output for a company.

Marginal Cost

The extra expense associated with manufacturing an additional unit of a product or service.

Oligopolistic Firm

A company operating in an oligopoly market structure, characterized by a few firms dominating the market, leading to specific behaviors like pricing collusion or competition.