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: guppy gummies, flopsicles, and mookies. 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 guppy gummies increases by 5%, the quantity of flopsicles sold decreases by 4% and the quantity of mookies sold increases by 5%. Your job is to use the cross-price elasticity between guppy gummies and the other goods to determine which goods your marketing firm should advertise together.

You work for an Advertising Company. You are asked to create an advertisement for the company which has 3 products to market. They are already in market but they want to market them again with a better advertisement. So you are given a data in which the cross price elasticity is described.

Three products are Guppy Gummies, Flopsicles and mookies. It is told in the information given by the company, that with the 5% increase in the price of guppy gummies, the quantity of mookies sold increases by 5% while the quantity of flopsicles decreases by 4%. So with this data, we can assume that Guppy Gummies and Mookies are the the complementary products whereas guppy gummies and flopsicles could be substitutes.

So I would go for the advertisement of Guppy Gummies with Mookies, as they have a direct cross price elasticity. So these two products would be advertised together.