Question 2: (20%) The following graph illustrates the effect of an increase in the price of cappuccinos from 1.60 to 1.80 on the demand for croissants in the city D. a) What is the relationship between these two goods? Answer by calculating the cross-price elasticity of demand between croissants and cappuccinos. Pceof Croissant: 5 D1 0 80 10:) Quantity of Croissanta Page 3 , b) The city D experienced as sharp decline in bakery industry in the years following ZOXX. Many bakers and baristas left the areas or found jobs in other industries. Then, the government decided to subside all the residents by distributing food coupons. Predict what is likely to happen to the price of croissants in the future. Use a graph to illustrate your