To Reduce Transfer Pricing Distortion,multinational Firms Are Supposed to Charge

question 38

Multiple Choice

To reduce transfer pricing distortion,multinational firms are supposed to charge prices to their foreign subsidiaries that are __________.

• A) Average variable costs
• B) Total costs
• C) Marginal costs
• D) Arm's-length prices

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Definitions:

Disposable Income

The money a consumer has left after paying taxes to use for necessities such as food, housing, clothing, and transportation.

Market Segmentation

The strategy of dividing a broad target market into subsets of consumers with common needs or characteristics, targeting each with a specific marketing mix.

Organizational Markets

Markets consisting of companies, governments, and institutions that purchase goods and services for operations, production, or resale purposes.

Psychographic Criteria

Factors that consider the lifestyle, attitudes, beliefs, social class, and other psychological attributes of consumers in market segmentation.