Swiss Pharmaceuticals has a Malaysian marketing subsidiary that complains that export price escalation makes the firm's products too expensive to sell in Malaysia.The subsidiary wants Swiss Pharmaceuticals to lower the transfer price to Malaysia.Should the firm lower the transfer price?

Question

Quizplus · Accepted Answer

The question does not provide enough information to determine whether the firm should lower the transfer price or not. Factors such as local competition and pricing, production costs, and potential loss of profits should also be considered. Additionally, there is no mention of exhaustion laws in this scenario, so options B and C can be eliminated. Option A may not always be the best choice as transportation costs are just one factor to consider in pricing decisions.

Swiss Pharmaceuticals Has a Malaysian Marketing Subsidiary That Complains That