Suppose I decide to sell fuel for a living. I have the pumps, tanks, etc., which were signed over to me by the previous owner, who then ran down the road screaming and hollering. (Well, okay, he was screaming and hollering when he signed the papers over, and he didn't look at all well.)
I borrow $5,000 for a tank of gas (5000 gallons at a $1 a gallon). Okay, so it's a small operation. I intend to sell those 5000 gallons for $1.20 a gallon, from which I will earn a profit of $1000, $500 of which I will pay on the loan, and $500 of which I will put in my pocket.
All is going well, but after I've sold half, I'm told that I will have to pay $1.25 a gallon for the next load. Now I'm in a pickle, I still need to make payment on the original loan, and I still want to eat, so I'd like to have that $500 left over. Instead, I'll have to borrow another $750, after making payment, and go hungry.
My best solution is to raise my price, so that I make enough to pocket my $500, repay $500, and have $6250 available to buy another tankload. At this point, I've got $3000 and 2500 gallons in the tank, so I need to sell the remaining 2500 gallons at $1.70 to get to where I need to be.
Otherwise, I'll be running down the road, like the previous owner.
Quod scripsi, scripsi.