Monopolistic Competition Name: NIKE COMPANY (SNEAKERS) How can you tell that the
ID: 1115609 • Letter: M
Question
Monopolistic Competition Name: NIKE COMPANY (SNEAKERS) How can you tell that the Nike Company is a Monopolistic Company
There are five main characteristics of Pure Competition:
1. Large number producers and buyers
2. Uniform product
3. No one producer or buyer can influence the price
4. No barriers to entering or exiting the market
5. Sufficient information available to buyers and sellers Now we are discussing Monopolistic Competition.
How can we tell that NIKE COMPANY is not a Purely Competitive market? Use using at least three of the characteristics of Pure Competition listed above.
What Product are you discussing: NIKE COMPANY (NIKE SNEAKERS)
1st of three What Characteristic of pure competition ae you using? ___________ ____________________________________________________________________ ________________________________________________________________________________________________________________________________________
2nd of three _______________________________________________________________________________________________________________________________________ ____________________________________________________________________
3rd of three ________________________________________________________________________________________________________________________________________ ____________________________________________________________________
Explanation / Answer
1) Nike does not produce a uniform product like a competitive firm, the products of the company are differentiated and have a different perceived value/quality.
2) Nike can influence the market price unlike a competitive firm as it faces a negatively sloping demand curve. (higher market power)
3) There is only one producer (Nike) and a large number of buyers.