Answer and Explanation: The demand for Nike shoes is more price elastic than the demand for sneakers as a whole because Nike shoes are luxurious goods (a).
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What is the price elasticity of demand for Nike?
The demand for Nike products is price inelastic because the increase in price have little to minor changes on the quantity demanded. If a large change in price is accompanied by a small amount of change in quantity demanded, the product is inelastic.
Is Nike demand elastic?
Nike’s products are price elastic since they are categorized as luxury goods. For instance, the demand for the luxury Nike jersey product is very sensitive to price changes since potential customers can do without the product when it is considered too expensive.
Are sneakers elastic or inelastic?
price inelastic
Using economic terms, consumers will not be very sensitive, or responsive, to price changes—so the demand for shoes will likely be price inelastic.
Is the demand for a specific brand of running shoes more elastic or less elastic than the demand for running shoes in general?
There are fewer substitutes for all running shoes (and they are not as good substitutes). Thus, the demand for a specific brand of running shoe should be more elastic than the demand for running shoes in general.
What is the type of demand on Nike?
Due to the specific area of operation of NIKE Inc., which is the narrow sportswear market, the demand for the company’s product can be estimated as rather inelastic.
How does Nike predict demand?
The Nike Fit app creates a digital picture of a customer’s foot using a combination of computer vision, artificial intelligence, and machine learning – then uses that picture to make informed product recommendations to the consumer.
Which goods have more elastic demands?
In general, necessities and medical treatments tend to be inelastic, while luxury goods tend to be most elastic.
Is Nike market demand increasing?
Nike’s digital sales through Nike’s apps and websites grew 22%, led by a 33% growth in North America, the company said.
What does elasticity of demand depend on?
Many factors determine the demand elasticity for a product, including price levels, the type of product or service, income levels, and the availability of any potential substitutes. High-priced products often are highly elastic because, if prices fall, consumers are likely to buy at a lower price.
Which of the following is likely to have the most price elastic demand?
Music downloads likely to have most price elastic demand.
What are the factors that affect elasticity of demand and how does each affect elasticity?
The four factors that affect price elasticity of demand are (1) availability of substitutes, (2) if the good is a luxury or a necessity, (3) the proportion of income spent on the good, and (4) how much time has elapsed since the time the price changed. If income elasticity is positive, the good is normal.
Why does demand generally become more elastic over time?
Why does demand become more elastic over time? Competition is increased. If prices rise but income stays the same, what is the effect on the quantity demanded? Fewer goods are bought.
Why the demand for the good or service provided by a firm is elastic or inelastic?
If the demand changes by more than the change in price or income, it has elastic demand. If demand changes by less than the change in price or income, it has inelastic demand. When demand changes by the same amount as price or income, the good or service has unit elastic demand.
What is an example of price elastic?
As a rule of thumb, if the quantity of a product demanded or purchased changes more than the price changes, the product is considered to be elastic. (For example, the price goes up by 5%, but the demand falls by 10%.)
What do you expect to happen to price elasticity of demand for a product over time?
Demand tends to be more price inelastic in the short-run as consumers don’t have time to find alternatives. In the long-run, consumers become more aware of alternatives. Price elasticity of demand measures the responsiveness of demand to a change in price.
What growth strategy does Nike use?
The Nike marketing strategy, in summary, is, invest heavily in marketing, use emotional advertising that every human being can identify with, offer premium products at premium prices and sell their products primarily through 3rd party retails stores.
What is Nike’s business strategy?
Nike has established a tradition of continuous innovation as part of its mission/vision strategy. The company has developed a consistent culture of keeping up to date with technological advancements in the sports industry to stay ahead of its competitors.
What kind of company is Nike discuss the type of business model that it uses?
The Nike Business Model is based on producing and selling athletic and sports products, including footwear, clothing, equipment — and also some services. Everything is under one of the most famous brands in the world.
Why is Nike better than their competitors?
However, Nike has got an edge over its competitors owing to several factors. Unique designs, great product quality, product and process innovation, and marketing have helped it achieve a strong competitive edge.
What is Nike’s biggest problem?
Nike is facing snarls in its supply chain that are slowing imports from its Asian factories and dragging down sales. Consumers’ preferences, priorities, and values are reshaping industries.