President of Central Supply Company: Profits are at an all-time low this fiscal year because of decreased demand for our products. ██ ████ █████████ ██████████ ███ ███████ ███ ████ ██ ███████ ███████████ ██ ██ ██ █████████ ██ ███████ ███ ███████ ████████ ██ ████████ █████████████ ███ ████ ███████ ███ ██ ██████ ███████ █████████ ██ ██ █████████ ████ ████ ██████████ ████████ ███████████
The president concludes that the only options for Central Supply Company are to reduce planned expansion, or to eliminate less profitable existing operations. Why? Because if the company’s profits stay low, it may go bankrupt. Because of this, the company needs to prevent further decreases in its already low profits.
Based on the company’s need to prevent its profits from falling, the president concludes that there are only two options: reducing expansion or cutting existing operations. The flaw here is that we have no reason to think that other options might not also be possible—the president never addresses other possibilities. For example, why not increase advertising, or improve existing products?
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