3. Suppose there are two firms in an industry. What is the difference in outcomes (prices charged by the firms) in that industry if the two firms are producing differentiated products, versus a case where the two firms are producing identical products? Briefly explain.

4. Suppose that there are two gas stations across the street from each other, Arco and Shell. Shell charges $4.09 per gallon and Arco charges $3.89 per gallon. At these prices, Arco does not want to change the price that they are charging. Can we conclude that there is a Nash equilibrium at these prices? Briefly explain using the definition of a Nash equilibrium.