ABSTRACT
This chapter looks behind the supply curve and investigates how easily the supply of leisure and tourism products can respond to changes in demand, using the concept of elasticity. It also considers how an organization’s costs respond to changes in output and distinguishes between private costs and social or external costs. This chapter enables the reader to:
understand and utilize the concept of elasticity of supply
identify the factors of production
distinguish between fixed and variable factors of production
analyse the relationship between costs and output in the short and long run
establish the relationship between costs and the supply curve
understand the reasons for economies of scale
identify methods and rationale for growth
distinguish between social and private costs.
