THE PRICE MECHANISM

The type of tourism industry that exists in different destinations depends upon the type of economy in which it operates. Most economies are mixed economies, comprising not only a market sector, but also a non-market sector, where the government (or state) uses planning and policy measures to provide public goods and services such as police, roads, general infrastructure and merit goods such as education, libraries and health. In a command (state-dominated) economy, planning directs resources to where the state considers there is greatest need (e.g. North Korea). In contrast, a market economy is an economic system wherein decisions regarding investment,