What Is the Minimum Transfer Price for the 25,000 Unit

question 4

Multiple Choice

What is the minimum transfer price for the 25,000 unit order that Division A would accept if it wishes to maintain its pre-order contribution?

• A)$3.50
• B)$4.00
• C)$4.80
• D)$6.00

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Definitions:

Groupthink

A phenomenon in which the desire for harmony or conformity in a group results in an irrational or dysfunctional decision-making outcome.

Group Loyalty

A sense of commitment and solidarity among members of a group towards their group and its goals.

Dysfunctional Behavior

Actions that are counterproductive to an individual’s own goals or well-being, often causing negative effects on others around them.

Fixation

An aggressive mechanism in which an individual keeps up a dysfunctional behavior that obviously will not solve the conflict.