5. A newspaper publisher is recommending that the price of its paper, The Mercury, be reduced below the price of a competing newspaper, The Bugle. This recommendation responds to a severe decline in circulation of The Mercury during the 5-year period following the introduction of The Bugle. The publishers line of reasoning is that lowering the price of The Mercury will increase its readership, thereby increasing profits because a wider readership attracts more advertisers. This line of reasoning is problematic in two critical respects.
While it is clear that increased circulation would make the paper more attractive to potential advertisers, it is not obvious that lowering the subscription price is the most effective way to gain new readers. The publisher assumes that price is the only factor that caused the decline in readership. But no evidence is given to support this claim. Moreover, given that The Mercury was the established local paper, it is unlikely that such a mass exodus of its readers would be explained by subscription price alone.
There are many other factors that might account for a decline in The Mercurys popularity. For instance, readers might be displeased with the extent and accuracy of its news reporting, or the balance of local to other news coverage. Moreover, it is possible The Mercury has recently changed editors, giving the paper a locally unpopular political perspective. Or perhaps readers are unhappy with the papers format, the timeliness of its feature articles, its comics or advice columns, the extent and accuracy of its local event calendar, or its rate of errors.