|
 
- 精华
- 0
- 积分
- 1350
- 经验
- 1350 点
- 威望
- 134 点
- 金钱
- 134 ￥
- 魅力
- 134
|
Profit margin can be explained as how much you can get from the sell after you pay all the cost. The passage says that because Country Z wanted to protect some industries, so it banned those products from outside. It makes the source of the products that these industries produce become smaller. Demand of that product was still the same, but the supply decreased, so the prices of those products went up.
To the buyers who needed those products to make things to sell out of Country Z, their cost went up.
The passage points out that the result was "Those export-dependent industries lost ability to compete effectively in their export markets." Which means those export-dependent industries needed to rise their price of their products because of the cost rise. Clearly, once you rise the price of your products, it is harder to sell them. Therefore, no one wants to rise their price and lose ability to compete if there is any option.
A. states that, those industries lost the ability to compete( rise their price) becuase "Profit margins in those industries were not high enough to absorb the rise in costs mentioned above"
For example, you sell ice cream, the price is $5, cost of milk $1, other expense $1. you earn $3 everytime.(profit margin)
However, one day, the cost of milk rises to $4, you earn nothing now because your profit margin is not high enough to absorb the rise in cost. So you need to rise your ice cream price and lose your competition ability (while other people still sell $5 ice cream) without choice. |
|
