One of the problems of transfer prices comes from the successive impact of the prices as the product moves downstream toward the consumer. At each step, the transfer price becomes the ________ for the next part of the company.
A. marginal cost
B. negotiated price
C. total cost
D. market price
Answer: A
You might also like to view...
The above figure shows the payoff matrix facing an incumbent firm and a potential entrant. What policy could government adopt to prevent entry deterrence by the incumbent?
A) production quotas B) price ceiling C) safety standards D) None of the above is correct.
In the 1600s, _____ and _____ emerged as the chief competitors in the race for control of North America
a. Spain; England b. England; Holland c. England; France d. Spain; France
At the current level of production, if the firm's marginal costs exceeds marginal benefits, then
a. The company should produce more b. The company is maximizing profit at this output c. The company is producing too much d. Not possible to determine
A monopoly can earn positive profits because it
a. can sell unlimited quantities at any price it chooses. b. takes the market price as given and can sell unlimited quantities. c. can set the price it charges for its output but faces a horizontal demand curve. d. can maintain a price such that total revenues will exceed total costs.