The following appeared in an announcement issued by the publisher of The Mercury, a weekly newspaper:
"Since a competing lower-priced newspaper, The Bugle, was started five years ago, The Mercury's circulation has
declined by 10,000 readers. The best way to get more people to read The Mercury is to reduce its price below that of
The Bugle, at least until circulation increases to former levels. The increased circulation of The Mercury will attract
more businesses to buy advertising space in the paper."
I was just doing a practice essay, and this was tonight's topic that I picked. I am confused as to what the conclusion actually is, and whether it is actually stated. I reasoned that the conclusion is that ultimately, profits will increase in the long term. The premises (except for the part "...at least until circulation increases to former levels.") seem fine, and the assumptions are easy to attack:
- author assumes that new customers will stay if prices increase
- assumes that old customers wont get fed up with price fluctuation and decide to leave
- assumes that advertisers demand wont decrease (follows from previous two assumptions)
- assumes that profit will not decrease in long term as a result of its plan.
any thoughts?
"Since a competing lower-priced newspaper, The Bugle, was started five years ago, The Mercury's circulation has
declined by 10,000 readers. The best way to get more people to read The Mercury is to reduce its price below that of
The Bugle, at least until circulation increases to former levels. The increased circulation of The Mercury will attract
more businesses to buy advertising space in the paper."
I was just doing a practice essay, and this was tonight's topic that I picked. I am confused as to what the conclusion actually is, and whether it is actually stated. I reasoned that the conclusion is that ultimately, profits will increase in the long term. The premises (except for the part "...at least until circulation increases to former levels.") seem fine, and the assumptions are easy to attack:
- author assumes that new customers will stay if prices increase
- assumes that old customers wont get fed up with price fluctuation and decide to leave
- assumes that advertisers demand wont decrease (follows from previous two assumptions)
- assumes that profit will not decrease in long term as a result of its plan.
any thoughts?
