- The following appeared in a memo from the business manager of Medicine, Inc., a local drugstore.
"Most business analysts for the drugstore industry have stated that even when a nation's economy is weak, drugstores' profits are unlikely to decline appreciably. While consumers might put off some kinds of purchases when the economy is slow, prescription and over-the-counter drug purchases are dictated by consumers' health needs, which are independent of the economy. Therefore, Medicine Inc. is likely to continue to have increasing profits and should plan to open an additional drugstore next year."
WORDS: 242
TIME: 00:29:00
DATE: 2010-2-15 19:07:50
The argument asserts that the medicine inc will have increasing profits and should plan to open an additional drugstore basing on the reason that the prescription and drug purchases are independent of the economy. However, there are several flaws which render the argument unpersuasive.
First of all, the argument fails to provide any evidence showing that the purchases of drug will increase in the future. The analysts only mention that the weak economy tends to impose little negative influence on the drugstore's profits, that does not necessarily mean when the economy is strong, there is a tendency in which the drugstore's profits will automatically go higher. Hence the argument is ungrounded in predicting an argument in the purchase of drugs.
Another reason enhancing my doubt lies in the fact that an additional drugstore will obviously lead to the increase of cost, including the rent of housing, the human resources cost and the managements cost. The economic common sense shows that many other factors could exert significant influence on the balance sheet of drugstore, which includes but not limited to
possible change in the research and manufacturer of drugs, the position of the new drugstore, and new health care regulations. Therefore, without considering all of these elements, opening an additional drugstore is a prudent plan which probably results in a deficit.
In the end, the argument should take into many other accounts mentioned above before moving to the plan of an additional drugstore.