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Pointless solution for ABC’s trade deficit
Posted on April 2nd, 2011 by Pedro
“The country of ABC can best solve its current trade deficit problems by lowering the price of abc, its primary export. Such an action would make ABC better able to compete for markets with other abc-exporting countries. The Sale of ABC’s abc abroad would increase, and this increase would substantially reduce ABC’s trade deficit.”
The argument above states that the best solution for country ABC to reduce its trade deficit is to lower the price of abc. This solution will make ABC’s abc more competitive in other countries and therefore increase sales, which would reduce in a significant reduction of ABC’s trade deficit. This argument relies on several unsupported assumptions and therefore fails to be persuasive.
First, the argument assumes that the current price of abc is not already the lowest in the market. If ABC’s abs is already the lowest price in the market, it is very likely that a price reduction will not increase sales for this product. If it is true that ABC’s abc is already the lowest in the market, reducing the price will have the reversed effect and the trade deficit will increase even further.
Additionally, the argument assumes that for consumers the main factor when buying abc is the price. However, there are other factors that can influence consumers when buying abc. For example consumers find quality or a trustful brand more important than price. If this is the case sales for ABC’s abc, will not necessarily increase and have a positive effect on ABC’s trade deficit.
To make this argument persuasive, the author needs to provide evidence that the key decision factor for consumers the is price when buying abc. Further the author need to give evidence that ABC’s abc is not the cheapest in the market. By not including these points in the argument the author fails to make a persuasive argument.
