All of the following are true regarding transfer prices except which one?
A) The transfer price is the internal firm price on an input that input-producing division charges the input-using division.
B) The transfer price is the internal firm price on an input that input-using division charges the input-producing division.
C) Law in many nations state that a transfer price must equal the price charged to an independent customer.
D) Transfer prices can affect the taxes a firm must pay.
B) The transfer price is the internal firm price on an input that input-using division charges the input-producing division.
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A firm's ______ cost is equal to the sum of the ______ costs of the individual units it produces.
A. total; average B. variable; average C. total; marginal D. variable; marginal
The term market power refers to
A. A firm's ability to alter the market price or quantity of a good or service. B. A firm's ability to eliminate free riders. C. The government's ability to change market outcomes. D. The government's authority to tax businesses.
Sky-High Skywriters charges competitive prices for its skywriting services even though it has no competition. This is most likely because
A. It is a natural monopoly. B. It operates in a contestable market. C. It cares more about customers' well-being than its own well-being. D. There are no economies of scale in this industry.
According to the short-run Phillips curve, the unemployment rate and the inflation rate are
A) negatively related. B) unrelated. C) positively related. D) unaffected by monetary policy.