A computer-chip maker,could solve its problem of declining sales by dropping its prices.This would make it better able to compete in the highly compet

I think the above argument assumes two things.First,The argument assumes that the reason for decining sales is the price of the chips it sales.Second,It assumes that only way to increase the sales is dropping the prices of its chips. Lets us first try to validate the assumptions.The first assumption as stated above is that prices of its chips is causing the decline in its sales.However,this may or may not be true.There might be several other reason because of which the sales has decline.The quality of chips that it manufactures might be either detoriating or the competitor has launched the better quality,efficient,less costly chip.or the company had lost it focus from chips to some other business or the company had reduced it spending on the marketing and advertising because of which the customers are not aware of the its chips.The other reason might be that the customer which had bought its chips had faced some snags or they had not not found the its chips value for money and hence they might have given the bad reviews about the chips.so just focussing on slashing the prices of its chips may be the correct solutions for the problem. Now,the second assumption which is stated as that the only way to increase the sales is dropping its prices.As we can make out from the first assumption that,dropping the prices of its chips may not be the right thing to do.There might be several other way out like manufacturing the better quality chips.Investing more on reaserach and development and manufacture better quality,efficent,cost effective chips for the customers.Or Increasing the spending on the advertising and exploring the new way of connecting to the prospective customer.Or if the existing customer had faced some technical snags,then provide them the better post sales service like replacing the malfunctioned chips with teh new one of if possible repair teh same. So as seen,the slashing the prices might be the good solutions only if the prices of the chips is the problem.so after proper analysing teh root causes shouls any decision be made and thus effectively solve the given problem of decling sales and thus substantially boost Davis' market share.