The business manager’s assertion is predicated on three seemingly valid premises: first, that the popularity of domestic cheeses is increasing; second, that the popularity of domestic cheeses is an indicator of economic health; and third, that domestic cheeses have a higher profit margin than do imported ones. However, there is a flaw in the chain of logic that links these three premises.

Although it is true that domestic cheese consumption is increasing, this does not necessarily mean that domestic cheeses are more profitable. Many factors could influence this increase, some positive and some negative. One positive factor is that consumers are becoming more aware of what goes into making various cheeses, and many are choosing cheeses based on their ingredients rather than their country of origin or taste. Many consumers prefer to purchase cheeses that are minimally processed, and these cheeses are becoming more popular. Another positive trend involves consuming cheeses that are lower in fat. Thus, some cheeses that are traditionally fatty, such as cream cheese, are becoming more popular, as are cheeses that are lower in fat but higher in protein, such as cheddar and Swiss. Finally, some cheeses, such as muenster, are becoming trendy due to their increased adoption by chefs in gourmet restaurants. Although all of these factors contribute to the popularity of domestic cheeses, they do not automatically translate into higher profit margins. If domestic cheeses were more profitable, cheese makers would have produced more, and this has not been the case. In fact, many domestic cheeses are produced in much smaller quantities than are imported cheeses. Thus, if the demand for domestic cheeses grows to the point where the domestic producers are unable to supply it, the supply will decrease, thereby driving down the price of the product. Even if demand remains constant, the increased popularity of domestic cheeses has resulted in a decrease in their profitability.

The second premise that the popularity of domestic cheeses is an indicator of economic health is also flawed. Although the perceived popularity of domestic cheeses may contribute to increased consumption of domestic products, this does not necessarily indicate strong consumer confidence. Even though consumers may enjoy the product, they may still be concerned about the economy, or they may be choosing foods that they do not particularly like but feel they must buy as a result of economic necessity. Thus, while increased consumption of domestic cheeses may represent an increase in domestic consumption, it does not necessarily indicate that people are feeling more prosperous.

The third premise that domestic cheeses have a higher profit margin than do imported cheeses is also flawed. The profit margin of imported cheeses is determined by many factors, including the cost of production, the exchange rate, and the demand for the product. Because imported cheeses are produced in larger quantities than are domestic cheeses, their profit margin is higher than that of domestic cheeses. Therefore, even if the profit margin for imported cheeses did not change, they would still cost less to produce, and consumers would purchase them, resulting in higher profits. Therefore, although domestic cheeses are growing in popularity, this does not necessarily mean that they are more profitable.

If the assumptions made by the business manager turn out to be false, his argument will have little value. His assertion that domestic cheeses are more popular than are imported cheeses is correct, but his assertion that this popularity indicates economic health is flawed. Finally, the claim that domestic cheeses are more profitable than are imported cheeses is false. Therefore, his claim that the best way to increase profits at all of his stores is to discontinue stocking many varieties of imported cheeses and concentrate primarily on domestic cheeses is misguided.