Title: Transfer Pricing Problem

Contents

1. The problem of allowing managers of each division to set price and output based on maximizing their division’s profit

2. Transfer Pricing Problem

GMS Aviation manufactures small single engine planes. Its competitive strength comes…

(i) Marginal cost function of producing engines and aircrafts

(ii) Marginal revenue function of unfinished plane

 (iii) Profit maximizing quantity and price

(iv) Optimal transfer price of engines  

(v) Maximum profit of the company

Number of words: 933 (3 pages)