Which of These Motivate a Firm to Use Nonmarket Transactions

question 7

Multiple Choice

Which of these motivate a firm to use nonmarket transactions to acquire inputs and downstream services?

• A)Zero transaction costs in the spot market
• B)Absence of market power
• C)Steady supply of the key input used in production
• D)Imposition of low tax rates on a particular production unit

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Definitions:

Noncontrolling Interest

Refers to the portion of equity in a subsidiary not attributable directly or indirectly to the parent company.

Acquisition-Date Fair Value

The fair value of an asset or liability at the date it is acquired in a business combination.