Some Economists Argue the Reason Nike Has Such a High

question 2

Multiple Choice

Some economists argue the reason Nike has such a high market share in the athletic shoe industry is because the company spends much more on media advertising and for endorsement contracts than other shoe manufacturers.This makes it difficult for new companies to enter the industry and compete against Nike because it has created:

• A)economies of scale.
• B)barriers to entry.
• C)economic censorship.
• D)protestant ethic.
• E)non-competitive pricing.

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Definitions:

Cost Center

A division within an organization that does not directly add to profit but still incurs costs, such as a research and development department.

Maintenance Department

A division within an organization responsible for the upkeep, repair, and servicing of equipment and facilities.

Direct Expense

Expenses that can be directly attributed to the production of goods or services, such as raw materials and labor costs.

Profit Center

A profit center is a branch or division of a company that is responsible for generating its own revenue and profit, evaluated independently.