​When Considering Setting the Transfer Price at the Market Price

question 12

Multiple Choice

​When considering setting the transfer price at the market price of a product similar to the intermediate good that is already available on the market

• A)​It is important to recognize that the market price includes a margin above marginal cost
• B)It is OK if the product on the market includes costly features your downstream division does not use
• C)It is OK if the product on the market is inexpensive because its quality is lower than you use
• D)​If it is similar enough,it is justification for you producing it in-house

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Definitions:

Pat-down Search

A physical search of a person's outer clothing to detect weapons or contraband, typically performed by law enforcement.

Warrant

An order authorizing a payment of money by another person to a third person. Also, an option to purchase a security. As a verb, the word means to defend; to guarantee; to enter into an obligation of warranty.

Equal Protection Clause

A provision in the Fourteenth Amendment of the U.S. Constitution prohibiting states from denying any person within its jurisdiction the equal protection of the laws.

Discriminate

To treat someone differently or less favorably on the basis of certain characteristics, such as race, age, or gender, often in a way that is unfair or illegal.