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Transferring products or services at current market prices leads to sub-optimal divisional decision-making when: there is distress pricing in the market there are no additional

Transferring products or services at current market prices leads to sub-optimal divisional decision-making when:

there is distress pricing in the market

there are no additional costs or benefits to the company in buying or selling in the external market

the interdependencies of the subunits are minimal

the market for the transferred product is perfectly competitive

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