Contemporary Economic Analysis of Nike: Law of Demand and Supply, Emerging Theories and Models

BM533 Contemporary
Economic Analysis

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
The Law of Demand, up and down the same demand curve and shift in demand curve with its
factors in regarding to Nike....................................................................................................3
remaining constant. The law of supply, movement along the same supply curve and changes
in supply curve with its factors in regarding to Nike.............................................................7
Comparison of emerging theories and models in 21st century contemporary economics with
those of 20th century and relation of both of these to modern business practices..................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
An entrepreneur or a manager of a firm or company would often face situations in which
they have to answer some questions like why do the prices change with the occurring of events
such as changes in weather, wars, pandemics, why are some producers able to charge higher
prices than others. The solution to these problems can be referred to theory of demand and
supply. The chosen business for this report is Nike. Nike is a transnational company which deals
in composition, producing, developing and international advertising and trading of footgear,
clothing, appurtenances and amenities. It is the massive distributor of sports footgear and attires
& an immense producer of athletic gears (Baiman, 2016). In this case study explains the Law of
Demand, the Law of Supply, up and down same demand and supply curve and the shifts in their
curves in context to Nike. This case study further analyses the upcoming thesis and models in
21st century similar to economics with those of 20th century.
MAIN BODY
The Law of Demand, up and down the same demand curve and shift in demand curve with its
factors in regarding to Nike
The Law of Demand, one of the most important law of economic theories states the
nature of relation between the quantity demanded by the customers and the agreed price of a
product. It tell that the price of good and quantity demanded have in verse relationship , other
things being equal. There is an oppositely reaction between the price and quantity demanded,
ceteris paribus. The other things which are assumed to be constant are the consumer's income,
related commodities prices, consumer's taste and preferences and all factors other than price
which influence demand. If there is a change in any of these factors, then the unit price and
demand of commodity inverse relationship not certainly hold good. Therefore, all the factors
other than price and quantity need to be constant,below table present that how price and
quantities react to each other (Czyżewski and Miśkiewicz, 2019).
Demand Schedule of an Individual Buyer
Price per cup of ice cream Quantity of ice cream
demanded
A 60 0

B 50 2
C 40 4
D 30 6
E 20 8
F 10 10
G 0 12
It is important to understand the difference among a movement within a demand curve
and a movement of the whole demand curve. The changes in the quantity demanded due to the
change in price, all other factors remaining unaffected( no change take place) results in a
movement of the demand curve. When there is a dynamic up and down in demand at all possible
level of price due to change in one or more other factors like consumer's incomes, tends and
living standard of consumers, it results in movement of demand curve. Changes in demand refers
to a shift of whole demand curve because one or more factors which were earlier assumed to
remain unchanged. By change in quantity demanded, an economist means movement along the
same curve which is due to fall or rise in price of commodity. When the quantity demanded rises
due to decrease in price, there is an expansion of demand and when the quantity demanded
decreases due to the increase in price, there is a contraction of demand (Carrier and Miller,
2020).