Question ID:PT6 S1 Q27 Passage:Although the United States steel industry faces widely publicized economic problems that have eroded its steel production capacity, not all branches of the industry have been equally affected. The steel industry is not monolithic: it includes integrated producers, minimills, and specialty-steel mills. The integrated producers start with iron ore and coal and produce a wide assortment of shaped steels. The minimills reprocess scrap steel into a limited range of low-quality products, such as reinforcing rods for concrete. The specialty-steel mills are similar to minimills in that they tend to be smaller than the integrated producers and are based on scrap, but they manufacture much more expensive products than minimills do and commonly have an active in-house research-and-development effort. Both minimills and specialty-steel mills have succeeded in avoiding the worst of the economic difficulties that are afflicting integrated steel producers, and some of the mills are quite profitable. Both take advantage of new technology for refining and casting steel, such as continuous casting, as soon as it becomes available. The minimills concentrate on producing a narrow range of products for sale in their immediate geographic area, whereas specialty-steel mills preserve flexibility in their operations in order to fulfill a customer’s particular specifications. Among the factors that constrain the competitiveness of integrated producers are excessive labor, energy, and capital costs, as well as manufacturing inflexibility. Their equipment is old and less automated, and does not incorporate many of the latest refinements in steelmaking technology. (For example, only about half of the United States integrated producers have continuous casters, which combine pouring and rolling into one operation and thus save the cost of separate rolling equipment.) One might conclude that the older, labor-intensive machinery still operating in United States integrated plants is at fault for the poor performance of the United States industry, but this cannot explain why Japanese integrated producers, who produce a higher-quality product using less energy and labor, are also experiencing economic trouble. The fact is that the common technological denominator of integrated producers is an inherently inefficient process that is still rooted in the nineteenth century. Integrated producers have been unable to compete successfully with minimills because the minimills, like specialty-steel mills, have dispensed almost entirely with the archaic energy- and capital-intensive front end of integrated steelmaking: the iron-smelting process, including the mining and preparation of the raw materials and the blast-furnace operation. In addition, minimills have found a profitable way to market steel products: as indicated above, they sell their finished products locally, thereby reducing transportation costs, and concentrate on a limited range of shapes and sizes within a narrow group of products that can be manufactured economically. For these reasons, minimills have been able to avoid the economic decline affecting integrated steel producers. Stem:Which one of the following, if true, would best serve as supporting evidence for the author’s explanation of the economic condition of integrated steel producers? Correct Answer Choice:EChoice A:Those nations that derive a larger percentage of their annual steel production from minimills than the United States does also have a smaller per capita trade deficit. Choice B:Many integrated steel producers are as adept as the specialty-steel mills at producing high-quality products to meet customer specifications. Choice C:Integrated steel producers in the United States are rapidly adopting the production methods of Japanese integrated producers. Choice D:Integrated steel producers in the United States are now attempting to develop a worldwide market by advertising heavily. Choice E:Those nations in which iron-smelting operations are carried out independently of steel production must heavily subsidize those