Managers of most businesses want high profits in order to pay high dividends (红利) to investors. For this reason, they aim to keep costs as low as possible. They also want to set high prices to gain high revenues. But competition within the industry often prevents them from doing so. Generally, a business will not increase the price ofits output if its competitors will not increase their prices. If a business sets its prices higher than those of its rivals, many of its customers will buy the output of its rivals.
　　An important decision managers make is their choice of input-mix—what combination of capital, labor, and raw materials to use in production. The object is to keep production costs as low as possible. If labor costs are high, for example, a firm may invest in automatic machinery so that fewer workers are needed to accomplish the same task. If labor is cheap, the company may decide to employ extra workers instead of buying a machine to do the job. The combination of inputs that permits a firm to produce its goods or services at the lowest possible cost without reducing quality is called the most productive input-mix.
　　The goal of keeping production costs low also affects a company’s choice of location. The resources an industry needs and the customers it serves are rarely close to each other. As a result, a business must transport inputs, outputs, or both. A business also tries to keep transportation costs as low as possible.
　　Transportation costs are based on weight and bulk as well as on distance. The location a company selects may thus depend on whether the company’s product is heavier or lighter than the materials used to make it. The soft drink industry, which adds water to other ingredients(成分) to make its products, is an example of an industry that produces weight-gaining products. Soft drink companies choose locations near their customers. The paper industry is an example of industries that produce weight-losing products. Many such industries are near sources of raw materials.
　　1. What is the passage mainly about?
　　A. Setting prices for products in competition.
　　B. Investing in certain industries.
　　C. How to make high profits.
　　D. How to reduce costs for an industry.
　　2. What do businesses choose to do about the prices of their products in competition?
　　A. Set higher prices.
　　B. Leave the prices unchanged.
　　C. Offer lower prices.
　　D. Keep the prices adjustable.
　　3. The phrase “the most productive input-mix” means mixing inputs ________.
　　A. to produce goods or services at the lowest possible cost
　　B. through selling goods or services at the lowest possible prices
　　C. with goods or services sold at the lowest possible prices
　　D. to produce quality goods or services at the lowest possible cost
　　4. Why is a company usually very careful about choosing its location?
　　A. Because the materials it needs are rather far away.
　　B. Because the customers it serves are not so close.
　　C. Because its resources and customers are seldom close to each other.
　　D. Because both production and transportation costs are rather high.
　　5. The soft drink industry and the paper making industry are used as examples because _______.
　　A. they are different from each other
　　B. they share a lot in common
　　C. they are both making lower profits
　　D. they transport their products at the same costs
　　参考答案：1. D 2. D 3. D 4. C 5. A
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