A
1 only
B
Both 1 and 2
C
Neither 1 nor 2
D
2 only
Correct answer: (a) 1 only
Explanation
Statement 1 is correct as MSP recommendations are formulated by CACP and approved by CCEA. Statement 2 is incorrect because the MSP principle targets a minimum return of 50% over the A2+FL production cost formula, not the C2 cost.
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