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When considering setting the transfer price at the market price of a product similar to the intermediate good that is already available on the market,
When considering setting the transfer price at the market price of a product similar to the intermediate good that is already available on the market, a. consider whether the product on the market is inexpensive because its quality is lower than you use. b. if it is similar enough, it is justification you producing it in-house. c. it is appropriate to ignore that the market price includes a margin above marginal cost. d. it is OK if the product on the market includes costly features your downstream division does not use.To keep employees from shirking, invest in greater monitoring a. especially when monitoring is efficient. b. when incentives solve both moral hazard and adverse selection problems with employees. c. when monitoring is expensive relative to its benefits. d. when employees respond well to incentive contracts
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