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Content. Sport and Leisure industries Demand and supply analysis of leisure eventsIncome elasticity of demand and leisure activitiesMonopolies in the leisure sectorExchange rates and the travel industry. Sport and Leisure Industries. The sport and leisure industries covers the following:Holida
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1. The Economics Of Sport and Leisure
2. Content Sport and Leisure industries
Demand and supply analysis of leisure events
Income elasticity of demand and leisure activities
Monopolies in the leisure sector
Exchange rates and the travel industry
3. Sport and Leisure Industries The sport and leisure industries covers the following:
Holidays and travel
Film industry
TV
Theatre
Sports
4. Demand and Supply Analysis Of Leisure Events Demand and supply interact resulting in an equilibrium price for leisure events
Generally the higher the price of the product / event the less is demanded
The demand curve shows an inverse relationship between price and quantity demanded
If price changes then you would move along the demand curve to calculate any change in quantity demanded
5. Shifts in the demand curve for leisure events Shifts in the demand curve for leisure events can be caused by:
Prices of other goods either substitutes (other leisure events) or compliments
Incomes
Tastes and fashions
Consumer expectations
Advertising
Population level and structure
These factors can enable the demand curve to shift to the:
Left (less demanded at each price)
Right (more demanded at each price)
For example fashion and tastes could change meaning rugby becomes more popular so the demand for rugby increases shifting the demand curve out
The current performance of British teams and individuals influences the demand for sporting events if British teams / individuals are doing well demand is likely to be higher
6. Supply of leisure events The supply curve shows the relationship between price and quantity demanded
The supply curve generally slopes upwards at higher prices more is supplied
There is a positive relationship between price and quantity supplied
7. Shifts in Supply Curve The following factors can cause a shift in supply:
Profitability of other goods / services
Technology
Costs of production / supply
Natural shocks
Social factors
Expectations of producers
8. Demand and Supply Curve and leisure events The demand of leisure activities has increased in the UK as peoples incomes have risen
Changes in tastes / fashions and technology have also helped fuel the increase in demand
Since the 1960s people have been spending more time and more money on leisure activities
9. Income elasticity of demand and leisure activities Income elasticity of demand measures how responsive quantity demanded is to a change in income
Generally for leisure activities demand is elastic so when income increases demand increases by a greater proportion
This is because leisure activities are seen as luxuries
10. Income elasticity and leisure activities Elasticity of specific activities is influenced by the following factors:
Number of substitutes many leisure activities have lots of substitutes if the price of going to the cinema increases people may rent films or go bowling instead
The % of income spent on the product if leisure activities are relatively cheap e.g. the cinema they are likely to be more inelastic than more expensive activities such as holidays
11. Monopolies in the leisure sector Monopolies are examples of market failure
In some sectors of the leisure industry there tend to be large companies that dominate the market
This is apparent in the travel industry where travel agents are dominated by Thomas cook and airtours in the UK
Cinemas also tend to be dominated by large companies such as the Odeon, vue and UCI
12. Monopolies in the leisure centre The markets tend to be more like oligopolies in nature
This means that the firms often set prices which leaves the consumer with less choice
13. Exchange rates and the travel industry Exchange rates influence the demand for holidays
If the is strong then the relative cost of going on holiday is lower and therefore demand for holidays is likely to increase
The exchange rate between the and other currencies will influence the demand for holidays to different countries
Recently the $ has depreciated in value against the therefore holidays to the USA are cheaper and there has been an increase in demand for these
14. Summary Sport and Leisure industries cover holidays, film, TV and cinema
The price and quantity of leisure events demanded or supplied is influenced by the interaction between the demand supply curves
Shifts in the demand curve such as increased incomes have increased the demand for leisure activities
Leisure activities tend to be income elastic as they have lots of substitutes and are luxuries
Holidays are income elastic as they take a large proportion of peoples incomes
Some areas of the leisure sector like holiday companies and cinemas are dominated by large companies which set prices
Exchange rates influence the demand for holidays. When the appreciates more people will go on holiday as it is relatively cheap.