Lower costs of raw materials reduced profits in the textile industry. True False

The correct answer is - False.

The lower costs of the raw materials used in the textile industry resulted in higher profits for this industry. When the raw materials were higher, the textile industry had less profit as it was only able to rise the prices of it products to a certain level. Once the raw materials started to decrease in price, the textile industry came into a situation where it was paying less for the materials, but was also able to retain the prices for its products, which resulted in higher profits. The raw materials saw a decrease in price because of the ever growing competition, so in order for the producers to sell these materials they were lowering the prices so that they can out-compete the other producers.