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Followup on transfer price

This topic has 1 reply, 2 voices, and was last updated 7 years ago by John Moffat.

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February 25, 2018 at 7:24 pm #438929
humai
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Sir 2 things I want to ask regarding this:
If there is unlimited production capacity and unlimited external demand then in such case Minimum transfer price is greater than MC OR is it equal to MC?
If there is unlimited production capacity and limited external demand then in such case Minimum transfer price is greater than MC OR is it equal to MC?
February 26, 2018 at 8:01 am #438976
John Moffat
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The minimum is equal to the MC. The actual transfer price must therefore be greater than or equal to the MC.
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