8 substitutes complements or unrelated you work for a

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8. Substitutes, complements, or unrelated?
former economics student, you know that complements are typically consumed together while substitutes can take the place of other goods. Run-of-the-Mills provides your marketing firm with the following data: When the price of penguin patties decreases by 5%, the quantity of frizzles sold increases by 4% and the quantity of mookies sold decreases by 6%. Your job is to use the cross-price elasticity between penguin patties and the other goods to determine which goods your marketing firm should advertise together. Complete the first column of the following table by computing the cross-price elasticity between penguin patties and frizzles, and then between penguin patties and mookies. In the second column, determine if penguin patties are a complement to or a substitute for each of the goods listed. Finally, complete the final column by indicating which good you should recommend marketing with penguin patties. Relative to Penguin Patties Recommend Marketing with Penguin Patties Cross- Price Elastici ty of Deman d Complement or Substitute Frizzle s -0.80 Error! Filename not specified. Complement Error! Filename not specified. Yes Mooki es 1.20 Error! Filename not specified. Substitute Error! Filename not specified. No Points: 1 / 1 Close Explanation

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