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The Northwest Division of Kebalo Electric produces hydroelectric power. The power plant has seven machines that can harvest hydroelectric power on a continuous process such that the capacity of the plant is $5,000$ machine hours per month. The plant produces three types of electric power. Energy type $$Standard$$ is not easily stored, energy type $$Super$$ is easier to store and send to more remote regions, and energy type $$Bad$$ has no external market. However, energy type $$Bad$$ is easily transferred to the Southwest Division of Kebalo Electric where it can be transferred into a marketable energy source by the Southwest Division. The Southwest Division can further process the $$Bad$$ energy at a variable cost of $$1$ per unit and sell it for $$5$ per unit $($assume no limit on the amount that can be sold$).$ The selling price for the energy types are as follows $($note: a unit of energy is a kilowatt$-$hour$)$:

"Standard" "Super" "Bad"

Selling Price$/$unit $3\mathrm{.}56--$

Variable Cost$/$unit $123$

Fixed Cost$/$unit $21\mathrm{.}51$

Machine hours$/$unit $0\mathrm{.}250\mathrm{.}51$

The external demand for each energy source in units $($kilowatt$-$hours$)$ is as follows:

"Standard" "Super" "Bad"

Demand in units $($kilowatt$-$hours$)1,5003,000--$

Flag question: Question $9$

Question $9-2$ pts

The next three questions are about the optimal transfer pricing schedule for the Northwest Division to charge the Southwest Division for $$Bad$$ energy.

What is the optimal transfer pricing schedule for the Northwest Division to charge the Southwest Division for $$Bad$$ energy for the first $0-3,125$ units.

Group of answer choices

$0$

$3$

$11$

$13$

Flag question: Question $10$

Question $10-2$ pts

What is the optimal transfer pricing schedule for the Northwest Division to charge the Southwest Division for $$Bad$$ energy for the next $3,126-4,625$ units.

Group of answer choices

$0$

$3$

$11$

$13$

Flag question: Question $11$

Question $11-2$ pts

What is the optimal transfer pricing schedule for the Northwest Division to charge the Southwest Division for $$Bad$$ energy for the next $4,626-5,000$ units.

Group of answer choices

$0$

$3$

$11$

$13$

Flag question: Question $12$

Question $12-2$ pts

What is the optimal transfer price $($from the perspective of Kebalo Electric as a whole$)$ for "Bad" energy if the Southwest Division resides in a region that is regulated by a tax rate of $35\%,$ whereas the tax rate for the Northwest Division is only $15\%?$

Group of answer choices

Transfer at the lowest cost possible

Transfer at the variable cost

Transfer at the market price

Transfer at the highest cost possible

Flag question: Question $13$

Question $13-3$ pts

Explain your answer to the immediately preceding question, about optimal transfer price with tax.

Flag question: Question $14$

Question $14-3$ pts

What is the cost$/$benefit to the firm as a whole if the Northwest division is forced to transfer $4,000$ kilowatt$-$hours of $$Bad$$ power to the Southwest division at $$4\mathrm{.}00$ per kilowatt$-$hour? Explain your reasoning.

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