Examples of a market economy?
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03-27-2014, 11:47 PM
Post: #4
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Nike shoes was created in Oregon. Their designers are US-based and each pair of shoes sell at premiums over their competitors. Nike found that manufacturing the shoes overseas would be alot cheaper than to have factories in the US, so they set up overseas factories in Thailand and the Philippines.
Unemployment is relatively low in the US. But not only that, because of the standard of living, labor costs are high. Overseas in Thailand and the Philippines, unemployment is relatively high and the standard of living is low - so since the market supply of workers are high, Nike was able to lower their labor costs by hiring overseas workers. Lower labor costs mean higher profit margins. By utilizing the market economy of an overseas country, Nike was able to reduce their labor costs through the use of supply & demand forces on labor. In addition, Nike is famously known for their endorsements of high-profile athletes, so they are able to sell their shoes for a lot higher than their competitors since their demand is so high. |
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Messages In This Thread |
Examples of a market economy? - sathya s - 03-27-2014, 11:21 PM
[] - Ballin Chemist - 03-27-2014, 11:25 PM
[] - d00tchy - 03-27-2014 11:47 PM
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