Part B – Adidas
3. Adidas is one of the most successful global sportswear firms and has used celebrities such as Kayne West and Kylie Jenner as brand ambassadors in the past.
a) Who are Adidas’ main competitors and what market structure does Adidas operate in? Explain your answer by referring to the characteristics of the market.
b) How does the use of celebrity endorsers affect the equilibrium price and quantity of Adidas products sold? How does this affect Adidas’ competitiveness?
4. The article states that Adidas increased its investment in digital warehousing to boost sales.
a) Draw an aggregate demand and aggregate supply diagram to illustrate the effect of increased investment into the digital retail market by firms such as Adidas on the general level of income in the economy. Explain also in words.
b) In relation to your answer to a) comment on the potential macroeconomic risks of such continuous increases in investment.
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