Transferring products or services at market prices generally leads to optimal decisions when:
A)the market for the intermediate product is perfectly competitive
B)the interdependencies of the subunits are minimal
C)there are no additional costs or benefits to the company in buying or selling in the external market
D)All of these answers are correct.

Question

Quizplus · Accepted Answer

All of these options are factors that contribute to optimal decisions when transferring products or services at market prices. A perfectly competitive market for the intermediate product ensures that prices accurately reflect supply and demand. Minimal interdependencies between subunits minimize the potential for conflict or distorted decision-making. Finally, if there are no additional costs or benefits to the company in buying or selling in the external market, it makes sense to make transfers at market prices.

Transferring Products or Services at Market Prices Generally Leads to Optimal