10 . Substitutes, complements, or unrelated? 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: tappies, flopsicles, and kipples. 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 tappies increases by 4%, the quantity of flopsicles sold decreases by 5% and the quantity of kipples sold increases by 3%. Your job is to use the cross-price elasticity between tappies 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 tappies and flopsicles, and then between tappies and kipples. In the second column, determine if tappies 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 tappies. Relative to Tappies Cross-Price Elasticity of Demand Complement or Substitute Recommend Marketing with Tappies Flopsicles Kipples