At frank's delicatessen, frank noticed that the elasticity of customers differed in the short and longer term. frank also noticed that his increase in the price of sandwiches had other effects on his store. in particular, the number of sodas sold declined while the number of yogurts sold went up. how might you explain this pattern? if soda is a complement to sandwiches, then the cross-price elasticity is thus, as frank loses sandwich sales from the price increase, he will lose soda sales as well. if yogurt, on the other hand, is a substitute for sandwiches, then the cross-price elasticity is thus, as the price of sandwiches increases, more yogurt is consumed.
a. negative; negative
b. positive; negative
c. positive; positive
d. negative; positive

Joint cost cheyenne, inc. produces three products from a common input. the joint costs for a typical quarter follow: direct materials $45,000 direct labor 55,000 overhead 60,000 the revenues from each product are as follows: product a $75,000 product b 80,000 product c 30,000 management is considering processing product a beyond the split-off point, which would increase the sales value of product a to $116,000. however, to process product a further means that the company must rent some special equipment costing $17,500 per quarter. additional materials and labor also needed would cost $12,650 per quarter. a. what is the gross profit currently being earned by the three products for one quarter? $answer b. what is the effect on quarterly profits if the company decides to process product a further? $answer