Suppose two firms with differentiated products are competing on price. The reaction curve for Firm 1 is P1 = 4 + 0.5 P2, and the reaction curve for Firm 2 is P2 = 4 + 0.5P1. What is the equilibrium price outcome in this market?

Marginal revenue is less than price for price searchers

A) because they are monopolists. B) because they necessarily have some costs. C) if they enjoy grants of legal privilege. D) when they cannot charge all customers the maximum they are willing to pay for each unit purchased. E) when they have the ability to practice price discrimination.

The monopolist always maximizes its profits by producing the amount of output that sets the marginal revenue equal to zero

Indicate whether the statement is true or false