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Joined: 30 Jul 2010
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23 Aug 2010, 00:45
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Argument:
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.”
Discuss how well reasoned... etc.

Analysis:
Argument claims that The Mercury Newspaper should lower its price to increase circulation, thereby, increasing profits because a wider readership attracts more advertisements. Argument fails to consider key factors, on the basis of which argument can be evaluated. Argument relies on assumptions, for which there is no clear evident. Hence argument is rather weak, unconvincing and has several flaws.

Primarily, the argument readily assumes that decline in the circulation of newspaper The Mucrucry is only because of competing newspaper The Bigul’s low price. Author fails to consider other possible reasons for the decline. For example, decline of circulation could be due to major customer base of The Mucrucry changing their preference of news reading to another medium like internet, wherein they can get all the updates immediately and no need to wait until next day for fresh news. Or it could be because of recent change in newspaper format. There are various possible reasons which can result in decline of newspaper circulation. Author has simply assumed that lower price of competing newspaper is the only reason.

Secondly, the argument claims that reduction in price will increase the circulation. Author fails to mention the basis to support this line of reasoning. Reduction of price may have negative effect as well. For instance, the recent survey published by leading Business magazine concluded that cheaper does not always attract more customers. Survey asked people if they will buy “Nano”, world’s cheapest car, many people declined saying that they think “Nano” as as symbol of low status. Specifically, cheaper price may create doubt in customers mind about quality of newspaper and they may find it misaligned to their status. Author hasn’t considered this important factor.

Finally, the argument concludes that lower price will increase circulation and as a result attract more advertisements. More circulation, more advertisements this logic looks fine on face values but on closer observation, one can realize that it may not be the case. Advertisers may prefer the newspaper which has reach among wide demography or newspaper with customer base which matches the potential customer base of their business.

In summary, argument is flawed and therefore unconvincing. To strengthen the argument, the author must identify and explore relevant factors beyond cost before concluding that lowering subscription price will increase circulation and, thereby, increase advertising revenues.
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23 Aug 2010, 21:08
Looks fine to me, though some grammatical mistakes are there.

Also, do add this sentence in the last para, " Had the author answered the queries raised in above paras, the argument would have been logically more sound".
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08 Sep 2010, 12:01
Looks good. Just brush up language and enhance writing style.
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08 Sep 2010, 21:57
i think intro should include briefly what your body paragraph going to be
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05 Jan 2016, 00:02
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

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21 Jul 2016, 14:11
Hi Team,

I have just started my Awa journey and this is my very first analysis. Can somebody have a look at the following and let me know how else to improve ?

The argument claims that the circulation of “the Mercury” has declined because a of a lower priced newspaper available in the market and if “the mercury” lowers its price then they should be able to increase their circulation. The argumnet concludes that by taking into account only one differentiating factor between the two newspapers. Stated in this way the argument relies on the assumptions for which there is no proper statistical proof. Hence the argument is weak and has several flaws.

Firstly the argument readily assumes that the price is the only factor that has led to the decline in the circulation. What we need to look at instead is whether the reader find the quality of the content published in the new newspaper better ? in the event the better quality is the concern then even if “the mercury” reduces the price, it wont be able to achieve its goals. What “the mercury” will then need to do is have better writers and reporters.

Secondly what we also need to understand is whether the preference of the readers ,with respect to the type of information, has changed over the last five years. It is highly possible that the new newspaper adapted the style of publishing to the changing customers’ preferneces. In such a scenario “the mercury” will need to bring new perpective to its style of publishing and take corrective actions.

Finally the author has assumed that by reducing the price of the newspaper alone “the mercury” will be able to regain its circulation levels. The author needs to do a proper root cause analysis as the reasons behind the decline could just be more than one.

In conclusion, the argument is imperfect for the above mentioned reasons and is therefore unpersuasive.
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