Analysis of Elasticity: The demand for mini cassette players can be characterized by the following point price elasticity: Price elasticity= -2, cross price elasticity with AA Alkaline batteries = -1.5, and income elasticity = 3. Indicate whether each of the following statement is true or false, and please briefly explain your answer.
A) A price increase for cassette players will decrease both the number of units of demand and the total revenue.
B) The cross-price elasticity indicates that a 2% reduction in the price of the cassette player will cause a 3% increase in battery demand.
C) Demand for cassette player is price elastic and they are cyclical normal goods.
D) Falling battery prices will definitely increase revenues received by sellers of both cassette players and batteries.
E) A 3% reduction in cassette players price would be necessary to overcome the effects of a 2% decline in income