The Lerner Index informs us of what kind of goods we'd expect to see higher markups, i.e. price relative to the marginal gust of production. Which of the following statement is consistent with this perspective and the implications of the Lerner Index? Q Firms with goods that are highly elastic would have relatively more price selling power. O All of these are consistent with the implications of the Lemer Index. O Firms producing necessary goods would be expected to have relatively less price setting power. O Firms producing relatively inexpensive goods would have relatively more price selling power. If an own-price elasticity of demand is calculated and found to be -2.5, which of the following is true? O We would conclude that this good violates the law of demand O We would conclude that this elasticity is clastic, because a change in the good's price causes an even larger percentage change in quantity demanded O We would conclude that this elasticity is inelastic, because a change in the good's price causes a smaller percentage change in quantity demanded O We would conclude that this good is a normal good Suppose the firm assesses the marginal product of its inputs, and at the prevailing input prices (w and r), it finds that: MP MP K Whish of the following recommendations would you make to the firm? They should shift the production mix from labor to capital, using a more capital-intensive production mix. O The firm should scale up the level of production. They should shift the production mix from capital to labor, using a more labor-intensive production mix. There should be no change in the input mix used to produce