A Virtuous Cycle Occurs

question 144

Multiple Choice

A virtuous cycle occurs

• A)when lobbyists petition Parliament a public franchise; the lobbyist then raise money for the political party that granted the franchise.
• B)when monopoly profits are used to create new products for additional monopoly profits.
• C)when a firm can attract enough buyers initially to increase a product's usefulness to attract even more buyers.
• D)when a firm's sales volume reaches a level where the firm can take advantage of economies of scale; thereby reducing the price of the product to further boost its sales.

---

Definitions:

Agency Theory

A framework that analyzes the relationship and conflicts between principals (owners) and agents (managers) in a corporation, focusing on how to align their interests.

Managers' Behavior

The actions and decisions made by managers in the course of operating a business, which can significantly impact the company's performance and culture.

Stockholders

Individuals or entities that own shares in a corporation, granting them certain rights such as voting on corporate matters and receiving dividends.

Notes To Financial Statements

Supplementary information included with a company's financial statements to provide more detail and context about the financial condition and performance.