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Argument
"Davis Technologies, a computer-chip maker, could solve its problem of declining sales by dropping its prices. This would make Davis better able to compete in the highly competitive computer chip market. The sales of chips would increase and this would substantially boost Davis' market share"
My Response :
The author concludes that by dropping the prices of its computer chips, Devis technologies , a computer-chip maker, will be able to substantially boost its market share.Author's line of reasoning is that a decline in prices will enable Davis to compete in highly competitive computer chip market . Further, it will boost Davis's sales of chips,thereby boosting Davi's market share. The argument, as such, is full of unwarranted assumptions and is flawed.
First, the author assumes that Cost is the only factor behind declining sales of Davis's chips. However, it is quite possible that several other factors have costed Davis its sales. For instance, The quality of chips is not up to the standard; the computational power of chip is quite less as compared to that of competing products; the life of Davis's chip is less than those of competing chips; Davis's chip is using old technology no longer used in computers. Possibly one of , or probably all, these factors might have affected David's sales. Therefore, merely dropping price might not achieve the intended results.
Second, the author assumes that increase in sales will lead to a substantial increase in market share. However , this might not be the case. For instance, what if a whole new market emerges and the sales of Davis's competitors increase at much faster rate than the sales of Davis, even after Davis has decreased the prices of its chips? In that case, Davis won't be able to increase its market share even after decreasing the prices of its chips, and, hence, increase in sales might not translate into an increased market share, contrary to what is assumed by the author.
Third, the author assumes that Davis's competitor will not respond to a drop in prices offered by Davis. However, it is quite possible that Davis's competitors also drop the prices of their computer chips , thus further hurting Davis's already declining sales.Without ruling out this possibility , it is irrational to accept the validity of the argument
In sum, the argument, as it stands, is a bunch of questionable assumptions and is unsound. To strengthen the argument , the author will have to rule out possible factors, other than the price of chips, that might have lead to decreased sales of Davis's chips. Moreover, the author should provide conclusive contextual evidences demonstrating how Davis's increased sales will definitely lead to Increase in market share.Additionally, the author should take into consideration the response Davis's action will invite from competitors.
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