Which Transfer Price Approach Is Used When the Transfer Price

question 201

Multiple Choice

Which transfer price approach is used when the transfer price is set at the amount sold to outside buyers?

• A) market price
• B) cost price
• C) negotiated price
• D) variable price

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Definitions:

Imperfectly Competitive Industry

A market structure characterized by a few producers that have some control over the price and where products are differentiated.

Control Over Price

The ability of a person or entity to influence the market price of a product or service.

Individual Producer

A single entity or person that creates goods or provides services in an economy.

Market Power

Refers to the ability of a firm or group of firms to manipulate the price and output levels in the market to their advantage.