Final answer:
Several factors should be considered in determining whether an activity is treated as an appropriate economic unit, including the similarities and differences in types of business, the extent of common control and common ownership, and the geographic location. The correct answer is option d.
Step-by-step explanation:
In determining whether an activity is treated as an appropriate economic unit, several factors should be considered:
The similarities and differences in types of business: This involves examining the nature and industry of the businesses involved. For example, manufacturing and service industries may have different economic characteristics and considerations.
The extent of common control: This refers to the level of managerial control or ownership overlap between the activities. If there is a high degree of common control, it may indicate that the activities should be treated as a single economic unit.
The extent of common ownership: Similar to common control, if there is a significant level of common ownership between the activities, it may imply that they should be treated as a single economic unit.
The geographic location: This involves considering the physical proximity of the activities and how it may impact their operations and economic characteristics.
Considering all these factors is important in determining whether an activity is treated as an appropriate economic unit.