A selling division at capacity is indifferent between selling to outsiders and transferring inside at the market price.

Name: A selling division at capacity is indifferent between selling to outsiders and transferring inside at the market price.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

When a division is operating at full capacity, it can sell all its output at the market price, whether to external customers or internally. Therefore, it is indifferent as long as the price is the same.

A Selling Division at Capacity Is Indifferent Between Selling to Outsiders