Market Performance of Nike

Market performance of
Nike

Contents
1. Price elasticity of demand of Nike, calculate PED in 2021 and how it has changed from 2020...........3
2. Income elasticity of demand of Nike. Calculate YED in 2021 and how it has changed from 2020.......4
3. Market equilibrium of Nike. Graphics are expected!...........................................................................4
REFERENCES................................................................................................................................................7

1. Price elasticity of demand of Nike, calculate PED in 2021 and how it has changed from 2020.
The price elasticity of demand (PED) is a metric that measures how sensitive a product's quantity
sought is to price changes. Because all other factors of need are kept fixed, it is the proportion
change in the quantity sought in reaction to a one percent change in price. Nike's demand is price
inelastic, meaning that price movements have only a tiny impact on the amount desired. The item
is relatively elastic whether it responds to a substantial increase in value with a modest change in
the quantity requested (Liu and et.al, 2019).
Price elasticity of demand is a metric that compares changes in demand for certain items or
services (defined in demand of the consumers) with increases in the price of such goods and
services. Divide the percentage difference in desired quantity by the percentage change in the
price to get the indication. Demand is classified as elastic or inelastic depending on these
estimations. The desire for NIKE Inc.'s product may be predicted to be very inelastic due to the
company's unique area of activity, which is the restricted sportswear industry. As a consequence,
by lowering its pricing, NIKE Inc. is incapable of winning many additional customers. The firm's
shoes are the type that is thought to be the most inelastic out of all of NIKE Inc.'s goods. Nike
sneakers have developed a loyal following, which explains why they are always in high demand.
The fact that the pricing and profitability of certain of NIKE Inc.'s shoe designs are inelastic is a
significant indicator of this inelastic demand.
Calculation of PED: Percentage change in quantity demanded / percentage change in price
Price of sports shoes went up from 50 to 55
Quantity sold in stores decreased from 10000 units to 9000 units
(10000-9000/100) / (50-55/100)
10 /0.5
20