Re: bankruptcy questions

[Jim Devine <jdevine03@xxxxxxxxx>]

> Michael Perelman writes:
> >> The basic flaw is that the cost of flying one more passenger is minimal.  According
> >> to basic economic theory, competition drives prices down to that level, which cannot
> >> support the fixed costs.

On 9/22/05, David B. Shemano <dshemano@xxxxxxxxxx> wrote:
> I suppose the same problem theoretically exists for hotels, theaters, cruise ships.  Again, I don't see any evidence that entrepeneurs, investors, lenders, etc. agree with that it is impossible to make money in these industries.<

it depends on the competitive environment. The average company can't
"make money" (receive even a "normal" profit) in this kind of industry
if there are many competitors. On the other hand, it can make a profit
if competition is restricted either by the government or by private
initiative.

--
Jim Devine
"Segui il tuo corso, e lascia dir le genti." (Go your own way and let
people talk.) -- Karl, paraphrasing Dante.