Consider the own- and cross-price elasticity data in the table below.
(a) For which of the goods is demand elastic and for which is it inelastic?
(b) What is the effect of an increase in the price of CDs on the purchase of magazines and cappuccinos? What does this suggest about the relationship between CDs and these other commodities; are they substitutes or complements?
(c) In graphical terms, if the price of CDs or the price of cappuccinos increases, illustrate how the demand curve for magazines shifts.