The transfer price of an upstream product should always equal the market price when:
A) there is an outside market for the upstream product.
B) the price elasticity of demand for the upstream product is greater than 1 (in absolute value) .
C) there is a perfectly competitive market for the downstream product.
D) the marginal cost of the downstream product is greater than 1.
E) the firm is a monopolist in its downstream market.
Correct Answer:
Verified
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