A Price Charged for a Component by the Selling Division

question 26

Multiple Choice

A price charged for a component by the selling division to the buying division of the same company is called a(n)

• A) transfer price.
• B) economic value added.
• C) market price.
• D) cost-based price.
• E) None of these.

---

Definitions:

Market Power

The ability of a company or group of companies to control prices and total market output in an industry or sector.

Elastic Demand

Describes a market scenario where the demand for a product significantly changes in response to changes in the price of that product.

Less Elastic

Less elastic refers to a demand or supply that is relatively unresponsive to changes in price compared to a perfectly elastic curve.

Increase Price

A decision by a supplier or manufacturer to raise the cost at which goods or services are sold.