The demand for personal computers can be characterized by the following elasticities: price elasticity=5; cross-price elasticity with software=4; and income elasticity=2.5. Based on these numbers, explain why each of the following statements is either true or false.

A) A decrease in the price of personal computers will increase both the number of units demanded and the total revenue of sellers.

B) The cross-price elasticity indicates that a5percent decrease in the price of personal computers translates to a20percent increase in software demand.

C) Demand for personal computers is price elastic, and computers are normal goods.

D) Decreasing software prices will increase revenues received by sellers of both computers and software.

E) A2percent decrease in the price of personal computers would be necessary to overcome the effects of a1percent decline in income.