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ARGUMENT10
The following appeared in a letter to the editor of a Batavia newspaper.
"The department of agriculture in Batavia reports that the number of dairy farms throughout the country is now 25 percent greater than it was 10 years ago. During this same time period, however, the price of milk at the local Excello Food Market has increased from $1.50 to over $3.00 per gallon. To prevent farmers from continuing to receive excessive profits on an apparently increased supply of milk, the Batavia government should begin to regulate retail milk prices. Such regulation is necessary to ensure both lower prices and an adequate supply of milk for consumers."
In order to conclude that the Batavia government should begin to regulate retail milk prices to prevent farmers from continuing to receive excessive profits on an apparently increased supply of milk, the arguer has posed several evidence, including some statistic data, survey report and logic analysis. However, these evidence are not strong enough to support the conclusion.
First of all, as for the survey of the milk price in a local market, which is aimed at pointing out that the milk price has increased a lot during the past 10 years, the quantity of sample--only one local market is considered--is too few to have great value. It is likely that only the milk price in Excello Food Market is greater than before since its inconvenient location or the high property(房地产) price, while the milk prices in other markets are the same as before or even declined. Furthermore, the arguer does not take into account the probably inflation in the survey, which may, on the contrary, mean a decrease of milk prices in reality, because while the milk price has increased from $1.50 to over $3.00, the other commodity prices might have increased more the 5 times than before.
Another fallacy is the arguer simply treats the increased number of dairy farms as the increased supply of milk. In fact, they do not have much to do with each other. Maybe the big farms are divided into some small ones without any increase of milk cows, and this division leads to an augment of the farms but not the milk. Or even, a large numbers of the cows might die from a seriously disease, and such deaths directly lead to the drop of the supply of milk and an augment of the milk price.
And also, while estimating the profit of an industry, the cost, which the arguer overlooks, should be considered. To maintain the farm, to raise the cows, to transport the milk, all of the above need money which should be included into the cost of the milk industry. If the price of milk has increased during the past 10 years, accompanied with the simultaneous increase of the cost of milk, it is still unclear whether the farmers will receive great profits.
Even if the farmers really receive excessive profits, is it necessary to begin such a regulation? To regulate the retail milk prices may strike the farmers, who might lose interest in the milk industry, and therefore an unexpected reduction of milk will happen. Maybe there are some wiser means to deal with the problems, for example to raise the cost of the milk industry by levying more taxes on it.
Finally, the analysis that the regulation will ensure both lower prices and adequate supply of milk for consumers is unconvincing. The two things, actually, are contrary to one another in economics, for the lower prices are not attractive to the farmers and accordingly they will reduce some of their milk output.
To sum up, the arguer does not adequately demonstrate that the regulation of milk prices are useful and necessary, so we can hardly accept his conclusion.
[ 本帖最后由 lastangel 于 2007-3-9 09:02 编辑 ] |
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