Tourism Economics

All other things remain unchanged

Ceteris Paribus

factors that shift demand curve

Government policy, natural disasters, change in reputation

what does not shift demand curve to the right

rise in price of complimentary goods

price elasticity formula

change in quantity over change in price

what should you do if your customers act in a price elastic manner

slightly lower the price

When the customers (tourists)’ income level increases, you noticed
that the quantity demanded for your product (visitations to your
destination) decreases. If that is the case, your product
(destination) is a(n) __________ good.

Inferior

This demand forecasting technique is best when you
have old business data from which you can derive
seasonality, trend and outliers for the planning
purposes.

time series technique

the more vertical, the more ____ the supply is

inelastic

A merger between the two major airlines (they used to be
main competitors) is categorized as a Horizontal
Integration.

true

According to our class discussion, which one is NOT an
example of Social Cost that can be accrued from the airline
industry?

high airfare

According to our class discussion, which one is NOT a
market condition for Perfect Competition?

Higher level of entry barrier

The firms operating in markets between Perfect Competition
and Monopoly can exert some influence on price. These
firms are called price shapers.

False

A hotel charging different rates for rooms with identical
features (e.g. 1-king bed, sofa bed, and refrigerator) across
different guests depending on its demand/supply is a good
example of "Price Discrimination" strategy.

True

A kinked demand curve is prevalent in an industry where the
supplier is Monopoly.

False