Which of the Following Statements Is FALSE

question 17

Multiple Choice

Which of the following statements is FALSE?

• A) It is important to keep in mind that good governance is value enhancing and so, in principle, is something investors in the firm should strive for.
• B) Corporate governance is a system of checks and balances that trades off costs and benefits.
• C) Because good governance is based upon a basic set of principles, like those detailed in the Cadbury Commission's findings, one should expect all firms to display similar governance structures.
• D) The costs and benefits of a corporate governance system also depend on cultural norms.

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Definitions:

Monopolistically Competitive Firms

Companies that operate in a market structure characterized by many competitors, but each one sells a slightly differentiated product.

Economic Profits

The contrast between aggregate sales and cumulative expenditures, including both disclosed and undeclared costs.

Long Run

A period during which all factors of production and costs can be varied, without any fixed factors or constraints.

Profit Per Unit

The difference between the selling price and the cost of one unit of a product, indicating how much profit is made from selling a single unit.