This page will provide a description of simple economics.

Every company that produces a product or service incurs expenses in the production of that product or service. The profit that a company makes on the sale of that product or service is the difference between the price that the company gets when it sells that product or service and the cost of the expenses that the company pays for the production of that product or service. If the company sells these products or services for less than it costs to produce them they have a negative profit or deficit. If they want to continue operation, they must borrow money or incur debt in order to pay for these deficits or declare bankruptcy (since they have no money to continue operation) and cease operation.

Profit = (income from selling products or services) – (cost of producing products or services)

if 
    (cost of producing products or services) 
        is greater than
    (income from selling products or services)

then
    profit is less than 0 (negative) 
        and 
    a deficit exists (they have lost money on their operation);

therfore
    the company must either
        cease operation
            or
        borrow money to continue operation (incur debt);
            if
                the operation is seen as not profitable 
                (building large debt in order to continue a continuing non profitable operation)
            then
                 it is possible no one will be willing to supply the loan
                    and
                 the company must cease operation

Solution:

In order to continue operation the company must either
    cut expenses in producing the product or service
         (paying less for parts and materials may decrease their quality or reliability)
        or
     increase the income from selling the product or service
         (increase the selling price of the product or service)