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 substan

The author suggests that Davis Technologies should decrease their price in order to combat their declining sales. Although price is often a main factor in consumers' decisions to purchase products, decreasing price might not be best reason for them without further investigation. The recommendation as it stands currently needs more analysis and support before it can be adopted by the company.

The argument implies that dropping price will increase sales. This is unjustifed because the author has not stated the computer-chip maker's price level relative to those of other market players. What if it's price is already the lowest out of all the competitors? There is lack of evidence to indicate that price would solve the demand problem. If the price is already the lowest, then decreasing the price more will not increase the sales as predicated.

Morever, the author assumes that it's possible for David's Techologies to drop their product's price. What is the cost of the product relative to it's current market price? It's possible that the price can not be lowered further. If that is case, then the reccomendation would be utterly not useful since dropping the prince is not a viable option. Even if the company increased their market share, they would eventually go bankrupt because their revenue does not cover their costs.

Furthermore, the author assumes that price is the only factor that affects the sales of the computer-chip. There are numerous other factors that can affect the product's marketshare. Is the company marketing to the right customers? Is the product's functionality similar to other comparative products? Before rulling out all other factors that affect marketshare, the author can not assert that price will correlate with sales. It would be better if the company test out this hypothesis first in a small controlled regional market before launching it nationwide.

Consequently, the author's recommendation needs further examination. David's technologies should not adopt it without further support and proof that indicate price will increase sales.