Suppose Jack Weldon came up with a novel idea of making lamps out of recycled automobile tires. His firm, No-Skid Lamps, works three shifts a day trying to keep up with demand. Attracted by its success, other firms copy the idea and produce similar lamps. As a result, No-Skid Lamps' demand curve
A) shifts to the right and becomes more inelastic
B) shifts to the right and becomes more elastic
C) shifts to the left and becomes more inelastic
D) shifts to the left and becomes more elastic
E) stays the same

Question

Quizplus · Accepted Answer

When other firms enter the market with similar products, the demand for No-Skid Lamps' products would decrease as consumers now have more options to choose from. This shift to the left indicates a decrease in demand. Additionally, the presence of substitutes increases the elasticity of demand for No-Skid Lamps' products, as consumers can easily switch to another brand, making the demand curve more elastic.

Suppose Jack Weldon Came Up with a Novel Idea of Making