Transfer Pricing Is Defined as ________

question 98

Multiple Choice

Transfer pricing is defined as ________.

• A) methods for transferring funds exclusively from foreign subsidiaries to parent corporations
• B) compensation paid to owners of intellectual property
• C) the means by which subsidiaries and affiliates charge each other as they exchange goods and services
• D) the process through which a parent deposits a large sum in a foreign bank, which transfers it to a subsidiary as a loan

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Definitions:

Economies of Scale

The cost advantage experienced by a firm when it increases its level of output. The average costs per unit of output decrease with the scaling up of production.

Diamond-Mining Company

An entity engaged in the extraction of diamonds from the earth through mining operations.

Diseconomies Of Scale

The phenomenon where production costs per unit increase as a firm or production process increases in size, often due to inefficiencies.

Industry Demand Curve

A graphical representation of the total demand for the products or services provided by a specific industry at various prices.