Brad always buys and uses Nike brand golf balls. If he finds a Titleist or Callaway ball in the rough, he gives it away. Brand-loyal golfers like Brad allow Nike to charge a higher price and not lose many sales. By building a strong brand, Nike has effectively
A. increased the income effect for its products.
B. increased the cross-price elasticity for its products.
C. focused on the competitive parity point for its products.
D. shifted the golf ball market from a monopoly to pure competition.
E. reduced the price elasticity of demand for its products.
Answer: E. reduced the price elasticity of demand for its products.