Halifax & Smyth (H&S) is a clothier that specializes in expensive men's suits, and the firm makes the suits from wool fabrics that are woven by one of the firm's divisions
This division is not the only source for this material, and H&S could buy or sell wool fabric in the outside competitive market. H&S will buy some of the wool fabric that it needs for suits from the outside market if the: A) market price is less than the optimal transfer price if the outside market did not exist.
B) market price is less than the point where the net marginal revenue of weaving wool fabric intersects the marginal cost of wool fabric.
C) market price is less than the point where the net marginal revenue of assembling men's suits intersects the marginal cost of assembly.
D) Both A and B are correct.
D
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During the last decade, the price of a computer fell every year and the quantity sold increased every year. This experience suggests that the
A) "law of demand" was definitely contradicted. B) "law of supply" was definitely contradicted. C) demand curve shifted rightward. D) supply curve shifted rightward.
Which of the following is NOT included in aggregate demand?
A) Demand for goods and services for consumption B) Investment in business plant and equipment C) Net exports D) Investment in Treasury bonds