During the past year, the average price of lots along Lake Michigan in Carol Beach rose from $2,500 to $3,000 per foot of lake front. At the same time, sales of new homes located off the Lake rose from 40 to 70 units.
a. Calculate the cross elasticity of demand. EC=
b. Are lake front lots and new home lots off the lake compliments or substitutes. Type in either substitutes or compliments.