Nash-cournot equilibrium-monopolistically competitive market

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1. In a Nash-Cournot equilibrium, does an oligopoly firm produce at less than full capacity, at full capacity, or more than full capacity? Please explain.

2. In a monopolistically competitive market, the government applies a specific tax of $1 per unit of output. What happens to the profit of a typical firm in this market? Does the number of firms in the market rise or fall? Please explain.

Reference no: EM131238724

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