Question: True or false, plus explanation please. 2. Consider two rms producing an identical product with marginal costs M01 = $0.98 and M 02 = $1.00

True or false, plus explanation please.

2. Consider two rms producing an identical product with marginal costs M01 = $0.98 and M 02 = $1.00 correspondingly. The two rms set their prices simultaneously (Bertant compe- tition) and the lowest price gets the entire market. If they set the same price they split the market evenly. A set of equilibrium prices is 331 = $1.00 and pg = $1.01

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