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Briefly describe the conditions that should be met for market-based transfer pricing to lead to optimal decision making among subunits of a large organization. Notice

Briefly describe the conditions that should be met for market-based transfer pricing to lead to optimal decision making among subunits of a large organization. Notice that, when supply outstrips demand, market prices may drop well below their historical averages. What are distress prices and which transfer prices should be used for judging performance if distress prices prevail?

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