A hypothesis about the supply function in the tourist industry

Abstract

This paper describes the supply function trend in the tourism industry. In this regard, Sraffa’s theory is based on a strong link between a perfectly competitive system and supply at constant cost and consequently with stabile supply prices. The paper presents an analysis of specific problems of the supply trend in the tourism industry. Brief research shows that the tourism industry has a decreasing trend. The supply function’s character is due to internal economies and chiefly to external economies. An analysis on trends of the tourism industry proves that this sector of the economy operates in a system that is not of perfect competition but is characterized by imperfect or monopolistic competition.