Question

Such products as paper towel and cement that are bulky or heavy relative to their economic values

	A.	may be suitable for exporting because high transportation costs will be overcome by high profit margins in oligopolistic industries.
	B.	have high "value-to-weight ratios" that protect profit margins.
	C.	may not be suitable for exporting because high transportation costs will substantially reduce profit margins.
	D.	none of the above

Answer 1

Products such as paper towel and cement that are bulky or heavy relative to their economic values may not be suitable for exporting because high transportation costs will substantially reduce profit margins.

Profit margins will be less since you cannot sell at higher price in foreign country which is importing due to competition from local producers in that country compared to whom you have additional cost of transportation.

Option C is correct.

Since weight is more, value-to-weight ratios will be lower.