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Reading a text that mentions market prices may fluctuate as a disadvantage of using the Market price method of transfer pricing, I am not sure I fully understand ( the text just listed without explaining) Is this disadvantage a general disadvantage of fluctuating pricing? (hampers planning requires more data and technology etc ) or is this specific to transfer pricing?
It’s a general statement that the market price may fluctuate, it may be affected temporarily perhaps by adverse economic conditions, or dumping, or could depend on the volume of output supplied to the external market.
FYI
Dumping – when a country or company exports a product at a price that is lower in the foreign importing market than the price in the exporter’s domestic market.
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