Microeconomics applied in Industry

                                             Nike Co.

The company that I have chosen is NIKE , one of the leading brand in the footwear and Sports wear industry.
It has a wide range of product such as shoes, sports wear, athletic apprals and golf wear.

5 concept of microeconomics can be applied are as follows :-

1. First economic problem is Scarcity

Scarcity is the additional want over what can be produced to fulfill that want, especially when there is only a limited amount of resource is available.
Nike produced 200 shoes and 350 shirts due to limited resources but they want to produce more shoes, then they would sacrifice a certain amount of shirts in order to produce more shoes.

2. Law of Demand

When there is a sale all Nike products will be discounted, during this time , the sales generated would increase as customer are willing to purchase more .
There are 2 reason for the demand can exists are
  i) income effect ( afford more at lower price )
  ii) substitution effect ( substitute cheap good for similar one )

3. Law of Supply

It is the relation between the quantity that is supplied and the price of a product or a service during a certain period of time .
    When a new product is released and sold at normal price because of its limited edition, more customer would rush and purchase.

4. Elasticity of Demand

When their are more substitute products, the customer can easily switch to other products.
    Competitors like Adidas, Reebok, New Balance etc. So when the price of a Nike shoe are too high then the consumer can easily switch to other competitors product.

5. Price elasticity of supply

Individual response of the quantity supplied to a change in price .
      The cost rise a output rises , where by the lesser additional costs to produce extra output, more firms will be encouraged to produce thus the supply is said to be elastic.