If a Firm Uses Optimal Transfer Pricing Between Production Division

question 3

Multiple Choice

If a firm uses optimal transfer pricing between production division A and marketing division B,and a competitive external market for the output of division A exists,then production division A will surely:

• A) make positive economic profits.
• B) make normal economic profits.
• C) sell at marginal costs.
• D) sell at the external price.
• E) sell at less than the external price.

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Definitions:

Allergen Test

A medical test used to determine whether a person has an allergic reaction to specific substances.

Magnetic Field

A field of force created by moving electric charges, magnetic dipoles, or changing electric fields, influencing the behavior of charged objects in its vicinity.

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Magnetic Resonance Imaging, a diagnostic technique that produces detailed images of internal body structures using magnetic fields and radio waves.

Internal Body Structures

The components within the body that provide it with support, enable movement, and perform vital functions, including bones, muscles, organs, and blood vessels.