ou work for a marketing firm that has just landed a contract with Run-of-the-Mills to help them promot opsicles, and cannies. All of these products have been on the market for some time, but, to entice bett dvertisement that will market two of the products that consumers will likely consume together. As a for omplements are typically consumed together while substitutes can take the place of other goods. un-of-the-Mills provides your marketing firm with the following data: When the price of penguin pops d creases by 6% and the quantity of cannies sold decreases by 8%. Your job is to use the cross-price ela oods 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

ou work for a marketing firm that has just landed a contract with Run-of-the-Mills to help them promot opsicles, and cannies. All of these products have been on the market for some time, but, to entice bett dvertisement that will market two of the products that consumers will likely consume together. As a for omplements are typically consumed together while substitutes can take the place of other goods. un-of-the-Mills provides your marketing firm with the following data: When the price of penguin pops d creases by 6% and the quantity of cannies sold decreases by 8%. Your job is to use the cross-price ela oods 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

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

You work for a marketing firm that has just landed a contract with Run-of-the-Mills to help them promote three of their products: penguin pops,
flopsicles, and cannies. All of these products have been on the market for some time, but, to entice better sales, Run-of-the-Mills wants to try a new
advertisement that will market two of the products that consumers will likely consume together. As a 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 pops decreases by 8%, the quantity of flopsicles sold
increases by 6% and the quantity of cannies sold decreases by 8%. Your job is to use the cross-price elasticity between penguin pops 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 pops and flopsicles, and then between
penguin pops and cannies. In the second column, determine if penguin pops 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 pops.
Flopsicles
Cannies
Relative to Penguin
Cross-Price Elasticity of Demand Com
Complement
Substitute
bstitute Recommend Marketing with Penguin Pops
三

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