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 you find this argument. In your discussion be sure to analyze the line of reasoning and the use of evidence in the argument. For example, you may need to consider what questionable assumptions underlie the thinking and what alternative explanations or counterexamples might weaken the conclusion. You can also discuss what sort of evidence would strengthen or refute the argument, what changes in the argument would make it more logically sound, and what, if anything, would help you better evaluate its conclusion.

The author of the argument, presumably the newspaper publisher, bases his conclusion on the belief derived from a simplistic view of the marketplace that lowering the price will attract attention and, ultimately, increase readership. Unfortunately, the reasoning is flawed on several levels.

First, there are significant costs associated with publishing a newspaper. The Mercury is a paid-for publication, which must pay staff, rent office space, pay the phone bill, etc. The Bugle, on the other hand, is a non-profit venture, which receives revenue from advertising. Therefore, the publisher’s assumption that The Mercury’s cost structure is analogous to The Bugle’s is highly questionable. Second, the publisher has not provided data to support his claims; therefore, he may have no basis for asserting that The Mercury’s cost structure is similar to The Bugle’s. Of course, the publisher could have made cost comparisons with The Bugle, but to do so accurately, he would have had to know The Bugle’s revenue as well as the cost of producing and distributing the paper.

Moreover, The Bugle’s cost structure is still substantial while presumably lower than that of The Mercury. In publishing, as in any business, economies of scale exist. The larger the publication, the cheaper the cost per unit. Therefore, the Bugle would have to produce significantly more copies than The Mercury to generate a profit. On the other hand, Mercury has more significant economies of scale, which would lead to its lower costs. Thus, the publisher’s assumption that The Mercury’s revenue is comparable to The Bugle’s is flawed.

The second flaw in the reasoning is the assumption that the lower price of The Mercury will cause it to compete with The Bugle for advertising dollars. However, the publisher states that The Mercury has ‘lost’ 10,000 readers; he has not provided any historical or demographic information to demonstrate that The Mercury lost readers in the first place. Therefore, he lacks evidence to support his claim that lowering the price of The Mercury will convince advertisers to place their ads there. Even if The Mercury has lost 10,000 readers, The Mercury’s circulation was probably significantly larger before The Bugle’s appeared. The loss of 10,000 readers could easily be attributed to aging demographics, where younger readers have replaced older readers. If The Mercury’s circulation was at its peak before The Bugle’s appeared, it is unlikely that the reduction in readership can be attributed to The Bugle. The publisher’s assumption that if The Mercury’s circulation increases, it will attract more advertisers is also questionable. Advertisers are notoriously fickle. If The Mercury were to offer lower ad rates than The Bugle, The Bugle’s advertisers would have little incentive to advertise in The Mercury. Therefore, it is unlikely that The Mercury could successfully compete with The Bugle for advertising dollars, even if The Mercury lowered its price.

Thus, while the publisher’s argument that reducing the price of The Mercury will bring back readers to the newspaper may be plausible, it lacks the necessary evidence to support it.

The writer of the argument has implied that The Mercury’s circulation is declining because The Bugle’s circulation has increased. However, The Mercury’s circulation may have been declining because the paper’s readership was aging, and The Bugle’s circulation may have been growing because of younger readers. Again, the publisher has no data to support either of these assertions. Therefore, his argument hinges on the flawed assumption that The Mercury’s circulation is declining because The Bugle’s circulation has increased. Thus, the view is flawed on multiple levels.