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I didn’t understood the Part B of the question in the solution, Can you explain it ? , i understood the fact why A should sell outside as it earns 7 USD as opposed to seeling internally and getting 6 usd but the wording – Dividion A’s external cont. Is 7 , So it loses 7 usd for the group , I didn’t understand that
Basically cally i didn’t understood after ” This is because ” part
Please tell me where to find this question!
I must have Got half question erased by mistake, Its the Section C question fromm BPP Examkit.
Its called portable Garage Co. , Question No. 365 , Page no. 132
If they sell externally then they make a contribution of 15 – 3 – 4 – 1 = $7 per adaptor.
So if they do not sell externally they are losing (forfeiting) $7 contribution that could have been earned.