When an outside market exists for an intermediate product that is perfectly competitive, the ideal method of transfer pricing is often:

Question

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When an outside market exists for an intermediate product that is perfectly competitive, the ideal method of transfer pricing is often market price. This is because a perfectly competitive market ensures that the market price is efficient and fair, and using this price as the transfer price would ensure that both the selling and buying units receive a fair deal.

When an Outside Market Exists for an Intermediate Product That