sony products like Quiet-comfort headphones have been a popular choice for some time. However, newer firms like Jaybird and Plantronics are bringing out comparable products in the market. What will happen to the demand for headphones and to the Lerner index for the product as the newer firms enter the market?

Demand becomes less elastic, Lerner index declines

Demand becomes more elastic, Lerner index declines

Demand becomes less elastic, Lerner index increases

Demand becomes more elastic, Lerner index increases