Assume that a multinational company produces components in country A and ships them to a subsidiary in country B. In order to increase its profits
A) the company should charge a high transfer price for the components if income taxes in country B are higher than in country A.
B) the company should charge a low transfer price for the components if income taxes in country B are higher than in country A.
C) the company should charge a high transfer price for the components if income taxes in country A are higher than in country B.
D) None of the above
A
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The theory of the firm is based on the following two key assumptions:
a) Firms seek to maximize profits, and the firm is a single, consistent decision-making unit. b) Firms seek to become as large as possible, and they seek to maximize total revenue. c) Firms seek to maximize revenues, and to maximize undistributed profits. d) Each firm has a highly diversified product, and this leads to profit maximization. e) Firms seek to maximize profit, and to distribute the maximum value in dividends.
A reduction in the number of farms in the United States has caused food production to fall
Indicate whether the statement is true or false