Would they not be able to charge a price of their choice without having to compete with other companies (in an attempt to pull revenue)?
How about long distance telephone companies? Or many factions of US automobile companies? Or corn . Yes corn is a perfectly competitive market where economic profits equal zero (given current market conditions). They are subsidized entirely. As a national security matter, it would be a terrible move to end domestic farming, even though it is very much possible to obtain it in trade (cheaper too!).No, it doesn't. It can't, or we'll have a depression. NO company can operate with a zero profit, unless, as I stated before, that company is designed not to make a profit, to begin with.
This is the fate of all industries that we know of. The most recent emergence is the use of paper to read off of.
Two things are likely to emerge from this: 1.) prices will fall very close to the level of cost. 2.) Horizontal integration. The number of firms will be greatly reduced, allowing for positive price trends.Covering the safe amount of burning houses is maximizing profit margins. Point: if all companies have a safe amount of burning houses, all companies can offer lower prices.
You're a free market guy; government micromanagement of industry is never a good idea in my book. Imagine a government agency telling you how much tonnage you could load/haul, to keep prices "fair to the people". That would ****ing blow IMHO.That's why they call business a, "risk"...LOL!!!! The government can set regulations, so that every company has to insure "X" amount of burning houses, based on the number of burning houses from the previous year, so the market remains stable.
The number of burning houses is based on probability attained from data of previous payouts across an allotted pool. No insurance company ever makes it a business practice to ensure something equivalent to the proverbial "burning house". Although i have no doubt a policy can be drawn up if someone is willing to pay the right price, it does not seem like a good idea to me. Of course i could be wrong.If the amount of burning houses goes up, the rates will go up, just like when prices go up as the price of gas goes up. The market is a bitch, ain't it??
The first real job was working for an OTR freight company refurbishing piece of **** transcrafts. I eventually lost it to a combination of leased aluminum trailers, but why did i care, i was only 18 then.Now, in my situation, trailers are different. I can rent trailers, however, it isn't cost effective, unless I knowingly have thework coming up to justify the rentals. I've done it in the past, but I did because I had inside information of a sure thing. I still took a risk, but it turned out to be worth it in all those instances.