If Each Division of a Company with a Monopoly Niche

question 21

Multiple Choice

If each division of a company with a monopoly niche is allowed to set its transfer price at the profit-maximizing level for the next division as the product flows toward the consumer (assuming no external market for the product) ,then prices will:

• A)be higher and profits lower than with non-divisional organization.
• B)be lower and profits higher than with a non-divisional organization.
• C)be the same and profits will be the same as with a non-divisional organization.
• D)match the competitive benchmark and profits will be zero.

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Definitions:

Masked Branding

A marketing strategy where the brand's direct connection to the product is minimized or hidden to appeal to a different market segment.

Similar Way

A manner or approach that bears resemblance or adherence to another process or method.

Competitor's Brand

The brand or product that competes directly with another company's offerings in the market.

Masked Branding

A marketing strategy where a product's branding is deliberately understated or hidden, making the brand's presence less obvious to the consumer.