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Hello SIR,
IN A SITUATION WHERE THERE IS NO SPARE CAPACITY, IS THE MINIMUM TRANSFER PRICE THE MARGINAL COST OF INTERNAL SALES PLUS CONTRIBUTION OF SELLING EXTERNALLY?Please do not type in capital letters.
Yes – it is the marginal cost plus any lost contribution.
This is all explained (with examples) in my free lectures. The lectures are a complete free course for Paper PM and cover everything needed to be able to pass the exam well.
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