Self-study
Support There is relatively little room for growth in the overall carpet market, which is tied to the size of the population. ████ ███ ████████ ██████ ██ ██ ████ ████ ██ ██████ █████ ██ █████ ████████ ██ █████████ ███ ████ ███████ █████ ██ █████ ███████ ██ ████████ ████ ██ ███ ██████████ █████ █████████ █████████ ██████ ████ ██ ████ ██ ████ ██████ █████ ██ ███ ██████ ██████ ████ ███████ ██████████ ████████████ ███ ███ ███████ ████ ██████████ ██████████
Alternative Options
Here’s the argument distilled:
Premise: The overall size of the market can’t grow (much).
________
Conclusion: Companies can only gain market share by purchasing competitors.
Whenever an argument concludes that [this or that] is the only possible option, you should immediately ask if the premises have actually eliminated all the other options.
In this case, if we accept the overall size of the market as fixed, we can properly infer that companies can only gain market share by taking other companies’ business somehow. But there are plenty of ways to do that aside from buying them.
One great example, in fact, is marketing! If Carol’s Carpetorium runs an aggressive marketing campaign, customers who would otherwise have gone to Jimbob’s Basic Carpet Store might head to Carol’s Carpetorium instead, increasing its market share.
Any alternative mechanism of gaining market share (without expanding the overall market) will do, though. That’s what we’re looking for in the answer choices.
9.
Which one of the following, ██ █████ █████ ███ ████ █████ ██ ███ ██████████ ██████
a
Most of the █████ ██████ █████████ ██████ █████ █████ █████████ ██ █████
Selling other floor coverings (like rugs and… uh… tatami mats? animal pelts?) might help a company increase its profits, but it has no bearing on a company’s share of the carpet market. It’s not called the floor coverings market.
b
Most established carpet █████████ ██████ ███████ █████████ █████ █████ ███ ██████████ ███ █████ ██ ██ █████████ █████ ██ ███ ██████ ███ ███ ██████ ██ █████
If anything, the “no remaining niches” part (unnecessarily) strengthens the premise that there is little room for expansion in the carpet market, or the part of the conclusion saying marketing won’t work.
c
Two of the █████ ███████ ██ ███ ████████████ ████ ███ █████ ███ ██ █ ███████ ██ ███████ ███ ████████ ███ ███ █████ ██████ ██████████
The conclusion is about gaining market share, not revenue or profit. That these mergers led to declines in revenue and profit tell us nothing about whether they gained in market share. One can choose a strategy of decreasing prices and running at a loss (i.e., negative profit) for the explicit purpose of gaining market share.
d
Price reductions, achieved ██ ████████████ ██ ███████████ ██ ████ ██ ███ ████████ █████ ██ ███ ██████ ██████ ███ ███████ █████ █████████ ██ █████ ███ ██████ ███████████
(D) provides companies an alternative means of gaining market share without buying their competitors or expanding the overall market: by cutting prices, they can drive other companies out of the market and gobble up their market share.
e
The carpet market ██ ██████ ████ ███████ ██ ████ █████████ ███ ████████ ████████████ █████████ ██ ███ ████████ ███ ███████
This (unnecessarily) strengthens the premise that people will only purchase carpets once or twice by eliminating the potential idea that new patterns or styles might entice them to replace their carpets more frequently.