Lego is a popular toy which consists ofcolourfulconnectingplastic bricks which can be used to construct vehicles and buildings. There are several competitors to Lego: Lego-clones including MegaBloks, K'NEX and Best-Lock.However, The Lego Group has the exclusive rights to produce certain themed Lego sets including Harry Potter, The Hobbit, Star Wars.

Answer the following questions:

1. The existence of other products, manufactured by other companies, are examples of [Answer]. Type C for Complements, S for Substitutes or N for Neither.
2. Suppose The Lego Group currently has a box of The Hobbit themed Lego for a recommended retail price of $39.99 and they sell 30,000 units per year, in Boston. Economicmodellinghas shown that if they increased the price to $42.99 they would sell 25,000 units per year, in Brisbane.What is the price elasticity of demand using the mid-point formula?Answer to the nearest two decimal places.
3. Given what you have found in part b, if The Lego Group aims tomaximiserevenue, they should[Answer]the price. Type I for Increase, D for Decrease or N for Not change.