(2) Suppose that 1 percent of the employed lose their jobs each month and 20 percent of the unemployed find a job each month. Then the steady-state rate of unemployment is 3%.

(3) In a duopoly if the firms have agreed to jointly maximize profits, then each firm can increase its current profits by producing more. Use the following table to answer question (4) and (5). Listed in the table are the long-run total costs for two firms.