Sri Lanka is one of the major tea producing nations in the world. A substantial

Question

Sri Lanka is one of the major tea producing nations in the world. A substantial portion of the? country's annual tea production gets exported to various? countries, including the United Arab? Emirates, Russia, and other countries in the Middle East. Given the success in these? countries, Sri Lanka decided to foray into the Asian market. Research evidence indicated that people in Myanmar are major consumers of tea and that there is a high demand for tea in that country. This convinced industry experts in Sri Lanka that exporting to Myanmar was a good idea.

The above reasoning is based on the assumption that

A. tea exports to Myanmar will help the Sri Lankan producers to get an idea about how they might perform in other Asian markets.

B. Myanmar does not export tea.

C. Sri Lankan tea producers incur a higher cost of production than the tea producers in Myanmar.

D. people in Myanmar have similar tastes and preferences in tea consumption as the other consumers of Sri Lankan tea.

E. the market for tea in Myanmar is perfectly competitive.

Explanation / Answer

Option E is wrong as we can't predict the market nature of tea in Myanmar. Not enough information given

Option b is too wrong , being a major tea market (potential) doesn't imply that it doesn't export tea

Option d is also wrong bcoz high demand for tea in Myanmar doesn't imply that consumers share similar tastes & preferences as in Sri Lanka

C is incorrect too, as if Sri Lanka incur higher cost than why it will tend to export

So answer is option A

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