Rising world wholesale fair-trade coffee bean prices force the local Dunkin' Donuts franchise to raise its price of coffee from 89 cents to 99 cents a cup. As a result, management notices that donut sales fall from 950 to 850 a day. Shortly after the coffee price spike, the local Cinnabon franchise reduced its price on cinnamon rolls from $1.89 to $1.69. This resulted in a further decline in Dunkin Donuts donut sales to 750 a day (from 850).

a)What is the cross elasticity of demand for coffee and donuts? Are these two products complements or substitutes? Use the midpoint formula for elasticity when calculating the cross-price elasticities.

b)What is the cross elasticity of demand for Dunkin' Donuts donuts and Cinnabon cinnamon rolls? Are these two products complements or substitutes? Use the midpoint formula for elasticity when calculating the cross-price elasticities.