Transfer price

when goods are transferred from one division in a company to another division, and there is an intermediate external market for the trasnferred item in which the goods could be sold, which of the following states the economic transfer pricing rule for what the maximum transfer price should be?

answer: lower of net marginal revenue for the transferring-in division and external purchase price in the market for the intermediate product.

sir i do not understand this answer.

do you mind explaining this to me?

thanks as always!