GMAT Critical Reasoning
To protect certain fledgling industries, the government of Country Z banned imports of the types of products those industries were starting to make. As a direct result, the cost of those products to the buyers, several export-dependent industries in Z, went up, sharply limiting the ability of those industries to compete effectively in their export markets.
Which of the following conclusions about Country Z's adversely affected export-dependent industries is best supported by the passage?
- A Profit margins in those industries were not high enough to absorb the rise in costs mentioned above.
- B Those industries had to contend with the fact that other countries banned imports from Country Z.
- C Those industries succeeded in expanding the domestic market for their products.
- D Steps to offset rising materials costs by decreasing labor costs were taken in those industries.
- E Those industries started to move into export markets that they had previously judged unprofitable.
Correct Answer: A