There is relatively little room for growth in the overall carpet market, which is tied to the size of the population....

Sallyanne on July 20 at 01:19AM

Why is this correct

Do you mind explaining why this answer choice is correct?

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Emil on July 22 at 07:13PM

Hi Sallyanne,

The argument tells us that there is little room for growth in the carpet market due to the way that people buy (once when young, once when old), and so the only way to grow would be through mergers.

At first glance, I would like D only because A, B, C, and E clearly do not weaken. However, I think we could tell a story about why D would weaken the argument. D tells us that cutting prices has forced some producers to leave the market. Let's try a thought experiment.

100 Carpets/year
5 firms, each sell 20/year.

If we remove one firm (as D tells us is happening), each of our four remaining firms could now sell 35 carpets/year. So, these firms were all able to grow without having to resort to mergers.