Assume That the Income Elasticity of a Basic Microwave Oven

Multiple Choice

Assume that the income elasticity of a basic microwave oven is 4.8 and the price elasticity of the same product is 1.2.In a small town,where a recession hit hard and the average income fell by about 5%,would a 5% price cut in microwave ovens help producers get rid of a new shipment of inventories?

A) Yes,microwave ovens are price elastic.
B) No,microwave ovens are price inelastic.
C) Yes,microwave ovens are income elastic.
D) No,microwave ovens are income inelastic.
E) Probably not,since the effect of the decrease in income is more significant than the price decrease.