Author Question: When a product is perishable does that force suppliers to act differently toward consumers? What ... (Read 64 times)

OSWALD · **on:** Sep 11, 2019

Question 1

Was government assistance necessary for the development of the airline industry?

What will be an ideal response?

Question 2

When a product is perishable does that force suppliers to act differently toward consumers?

What will be an ideal response?

robbielu01 · **Reply #1 on:** Sep 11, 2019

Answer 1

Initially, it was thought that the airline industry needed protection from competition in order to develop in an orderly manner. Once developed, the airlines presumably would make a meaningful addition to the nation's transportation capability. Whether the industry would have proceeded as fast without government protection is an open question. Perhaps regulation might have made sense at the beginning but should not have lasted 40 years because it became a device that protected the industry from competition and forced consumers to pay much higher fares than they would have paid without regulation.

Answer 2

When a product is perishable such as a hotel room or airline seat on a particular day, unless that room or seat is sold, the revenue that might be collected will be forever lost. This is in contrast to a box of cereal in a supermarket or a car in a showroom that can be bought at a later date. So there is a sense of urgency about selling perishable items.