Now suppose a second airline enters the business, flying the same route. This new airline incurs the same fixed costs and faces the same variable costs per flight. But total market demand, of course, has not changed. If each airline charges $230, there will only be 660 passengers per day to share between them (six flights per day with 110 passengers per flight). With so few passengers, if both airlines try to operate six flights a day, they won't even have enough passengers on board to cover their variable costs! Lowering prices doesn't appear to help either. If each airline lowered its price to $167the minimum price at which it can afford to operatethere will be about 880 passengers per day. But 880 isn't enough passengers for each airline to fill six flights to capacity every day, so at this point, one or both of them will lose money. Might cutting back on the number of flights per day help? If one made four flights a day and the other made two, they could still charge $230 per seat