Which of the following will reduce a company's gross profit ratio?

(1)	A change in the product sales mix resulting in fewer sales of the more profitable products
(2)	Increasing costs of purchases not passed on to customers
(3)	An increase in the value of closing inventory held

Select one:

a. 1 and 2 only

b. 1, 2 and 3

c. 3 only

d. 2 and 3 only