Division X Makes a Part with the Following Characteristics

question 17

Multiple Choice

Division X makes a part with the following characteristics: Division Y of the same company would like to purchase 10,000 units each period from Division X. Division Y now purchases the part from an outside supplier at a price of $17 each.
-Suppose that Division X is operating at capacity and can sell all of its output to outside customers.If Division X sells the parts to Division Y at $17 per unit,the company as a whole will be:

• A)better off by $10,000 each period.
• B)worse off by $20,000 each period.
• C)worse off by $10,000 each period.
• D)There will be no change in the status of the company as a whole.

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Definitions:

Transnational Corporations

Large companies that operate and have assets in more than one country, having a significant influence on global economics and politics.

Collective Resistance

The act of standing together to oppose or challenge authority, policies, or societal norms, often in the context of social movements.

Capitalism

An economic system based on the private ownership of the means of production and their operation for profit.

Socialism

An economic and political system where the means of production are owned and controlled by the public or the state, with the goal of distributing wealth and resources more evenly across society.