You are planning to open a new Italian restaurant in your hometown where there are three other Italian restaurants.You plan to distinguish your restaurant from your competitors by offering northern Italian cuisine and using locally grown organic produce.What is likely to happen in the restaurant market in your hometown after you open?
A)Your competitors are likely to change their menus to make their products more similar to yours.
B)The demand curve facing each restaurant owner shifts to the right.
C)The demand curve facing each restaurant owner becomes more elastic.
D)While the demand curves facing your competitors becomes more elastic, your demand curve will be inelastic.

Question

Quizplus · Accepted Answer

The introduction of a new restaurant offering a differentiated product makes the market more competitive, leading to more elastic demand curves for each restaurant as consumers have more options to choose from.

You Are Planning to Open a New Italian Restaurant in Your