The Negotiated Transfer Price Approach Should Be Used When

question 32

Multiple Choice

The negotiated transfer price approach should be used when

• A) the selling division has available capacity and is willing to accept less than the market price.
• B) an outside market for the goods does not exist.
• C) no market price is available.
• D) any of these situations exist.

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Definitions:

Numerosity

The cognitive ability to understand and recognize quantities or the number of objects in a set.

Reciprocity

The social norm that suggests people should return help, not harm, to those who have behaved kindly towards them.

Foot-In-The-Door Technique

A persuasion strategy that involves getting someone to agree to a small request in order to increase the likelihood of agreeing to a larger request later.

Door-In-The-Face Technique

A persuasion strategy where a large, unreasonable request is first made knowing it will be refused so that a smaller, more moderate request will be accepted.