1. A Nash equilibrium occurs when:

each firm is doing the best it can, conditional on the actions taken by other firms.

each firm is doing the worst it can, conditional on the actions taken by other firms.

an oligopoly industry is characterized by excess demand, despite a market-clearing price.

an oligopoly industry is characterized by excess supply, despite a market-clearing price.

2. As firms enter a monopolistically competitive industry, the existing firms' demand curves will:

remain unchanged.

shift outward and become more inelastic.

shift inward and become more elastic.

shift outward and become more elastic.