Which of the Following Statements About Advisory Boards Is Incorrect

question 55

Multiple Choice

Which of the following statements about advisory boards is incorrect?

• A) The fact that a corporation has a board of directors does not preclude it from establishing one or more advisory boards.
• B) An advisory board can be established for general purposes or can be set up to address a specific issue or need.
• C) Similar to a board of directors, an advisory board has legal responsibility for the firm in certain areas.
• D) An advisory board is a panel of experts who are asked by a firm's managers to provide counsel and advice on an ongoing basis.
• E) A growing number of startups are forming advisory boards.

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Definitions:

Natural Monopoly

A market situation where a single firm can provide a good or service at a lower cost than any potential competitor, often due to economies of scale.

Defining Characteristic

A feature that allows the clear identification or differentiation of an item or concept from others.

Associated Cost

Costs that are directly linked with a specific activity, process, or project.

Implicit Costs

The opportunity costs that arise from using assets, resources, or funds in a certain way rather than in the next best alternative.