You are discussing price-setting in the labour discipline model. You are presented with the statements below. All else equal, which of the following is/are true?

Statement 1: All else equal, an increase in competition will shift the price-setting curve up.

Statement 2: The price-setting curve gives the value of the real wage that is consistent with a firm's profit-maximizing markup over production costs.

Statement 3: with mark-up unchanged, higher labour productivity will shift the price-setting curve upwards

A.

Statements 1 and 3 are true.

B.

None of the statements are true.

C.

Statements 2 and 3 are true.

D.

Only Statement 2 is true.

E.

All the statements are true.