When There Is an Outside Market for an Intermediate Product

question 72

Multiple Choice

When there is an outside market for an intermediate product which is perfectly competitive,the most equitable method of transfer pricing is

• A)market price.
• B)production cost pricing.
• C)variable cost pricing.
• D)cost plus markup pricing.

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Definitions:

Hasty Generalization

Drawing a broad conclusion from a small sample or isolated instances.

Accident Fallacy

Refers to a logical fallacy that involves applying a general rule to a specific case it does not apply to, often leading to erroneous conclusions.

Slippery Slope Argument

A logical fallacy that assumes a relatively small first step will lead to a chain of related events culminating in some significant effect, often negative.

Consequences

The results or outcomes that naturally follow from a person's actions or a set of circumstances.