When There Is No Intermediate Market

question 17

Multiple Choice

When there is no intermediate market:

• A) there is no optimal transfer price.
• B) the selling division cannot transfer its goods internally.
• C) the buying division cannot purchase its goods externally.
• D) there is no reason for top management to intervene in transfer pricing disputes.

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Definitions:

Unionized Workers

Employees who are members of a union, a group that negotiates with employers for better wages, benefits, and working conditions.

Minimum Wage

Minimum wage is the lowest legal remuneration that employers are allowed to pay their workers, established by government laws.

Quantity Demanded

The total amount of a good or service that consumers are willing to buy at a given price level in a given period.

Labor

The human effort, both physical and mental, used to produce goods and services.