8. 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: splishy splashies,
raskels, 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 splishy splashies increases by 6%, the quantity of raskels
sold decreases by 6% and the quantity of kipples sold increases by 3%. Your job is to use the cross-price elasticity between splishy splashies and the
other goods to determine which goods your marketing firm should advertise together.