This blog contains posts and comments written by students in Dr. Tufte's economics classes at Southern Utah University.
4/03/2005
Sneaker Market on The Rise
In the article "Trendy Sneakers Fuel Nike's Profits" it talks on how Nike and some other major brands of sneakers are having an increase in profits. Only 22% of basketball shoes sold will be found on the court. That means that the other 78% are being purchases as casual shoes, for the most part for fashion. Sneakers that cost more than $100 grew 18% this past year, and were a $600 billion market.
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1 comment:
Can you say monopolistic competition?
Nike is an excellent example that hadn't struck me before. When I was a kid, Nike just sold sneakers. Now they sell a differentiated image attached to a sneaker. The reason they come out with so many new styles is that free entry pushes the profitability of each individual line towards zero (but every new line earns monopoly profits for a little while).
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