Author Question: The transfer price between subsidiaries that maximizes profit for the parent company A) is the ... (Read 90 times)

Kikoku · **on:** Jul 1, 2018

The transfer price between subsidiaries that maximizes profit for the parent company

A) is the marginal cost of the producing subsidiary.
B) is the monopoly price of the producing subsidiary.
C) cannot be determined in the absence of non-production cost considerations such as taxes.
D) is the price that minimizes the purchasing subsidiary's marginal cost.

Question 2

With asymmetric information among consumers and positive search costs, a firm may

A) raise its price above the monopoly price.
B) price at the monopoly level.
C) price at the competitive level.
D) None of the above.