If the Selling Subunit Is Operating at Capacity, the Opportunity

question 73

True/False

If the selling subunit is operating at capacity, the opportunity cost of transferring a unit internally rather than selling it externally is equal to the market price minus the variable cost.

---

Definitions:

Production Possibility Frontier

A curve depicting the maximum possible output combinations of two goods that can be produced with available resources and technology.

Economic Growth

The increase in the inflation-adjusted market value of the goods and services produced by an economy over time, typically measured as the percent rate of increase in real gross domestic product (GDP).

Capital Stock

Refers to the total amount of physical goods and financial assets owned by a company that are used in producing goods or services.

Capital Production

The process of creating goods and services through the combination of labor, land, and capital.