Forward and backward linkages apply to which of the following development strategies?

Suppose a perfectly competitive firm is in long-run equilibrium and there is a decrease in demand

Suppose also that the firm operates in an industry in which the prices of productive inputs vary with the level of output, increasing when output increases and decreasing when output decreases. Which of the following will occur at the new long-run equilibrium? A) Price will be lower than it was at the initial long-run equilibrium. B) Price will be the same as it was at the initial long-run equilibrium. C) Price will be higher than it was at the initial long-run equilibrium. D) The industry supply function will shift to the right.

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