Use the information below to answer the questions below. Please, use the Demand

Question

Use the information below to answer the questions below.

Please, use the Demand and Supply curves to explain where necessary.

(A) Nike in order to make her shoes more comfortable for the legs decided to put little holes on the shoes so as to enable more air flows to prevent odour. This has therefore led to people preferring Nike shoes to Addidas shoes during the time frame (2000 to 2008). If the equilibriun price of shoes is fixed at $150 and the supply of Addidas shoes is fixed;

i. How does Nike’s innovation affect the demand for Addidas shoes?

ii. If the number of people that participate in sports increases, what happens to the demand for Addidas shoes?

iii. The government of Northern Cyprus increased the minimum wage from 1,500 TL to 2000TL. Would this affect the quantity demanded of Addidas shoesor the demand for Addidas shoes?

iv. If Addidas decides to adopt similar innovation as that used by Nike and also reduces the price of her shoes to $145, how does this affect the quantity demanded of Adidas shoes?

Explanation / Answer

1) nike's innovation in increasing comfortness of shoes for customes will increases the demand for nike's shoes and decreases the demand for Addida's shoes.

2) If the number of people that participate in sports increases, then they will demand more shoes which increases the demand for Addida's shoes.

3) If The government of Northern Cyprus increased the minimum wage from 1,500 TL to 2000TL, then cost of making shoes increases which shift the supply curve leftward and increases the prices of shoes. so, at higher price people will demand less shoes.

so, due to action of government quantity demanded decreases of Addida's shoes.

4) due to innovation in Addida's shoes, the price of her shoes decreases to $145. so, at lower prices people will demand more quantity of Addida's shoes.

Related Questions

Navigate

• Browse (All)
• Browse U
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.