In theory, when considering Transfer Pricing, using an external market-based price for the transfer, the effect on 2 divisions could be described as...

1. Overall, the financial impact on the whole company would be the same (if the divisions bought/sold externally, instead of undertaking internal transfers)

2. The supplying division would benefit; and the receiving division would not

3. There is never a known external market price

4. The receiving division would benefit; and the supplying division would not