Assume a perfect competitive market for the intermediate product. 1. The internal transfer price will be equal to the marginal cost of the production division or the perfect competitive price of the intermediate product. 2. The external demand for the intermediate product will be price inelastic or perfect elastic. 3. The marginal cost of the production division is MCP = 4 + 0.002Qp and the internal transfer price is 60. Calculate the units of the intermediary product that the production division will produce. 4. Assume the previous information and that the demand for the final product is PM = 90 - 0.001QM and the marginal cost for the final product is MCM = 4 + 0.003QM. Calculate the units of the intermediate product for internal use