Let us focus on the market for x and characterize a, Mathematics

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Let us focus on the market for x and characterize a

Consider a free-entry equilibrium in which sector y is competitive, and x producers compete a la Cournot. Zero profits in the competitive sector imply that the salary will be equal to the price of y, which we have normalized to 1. Let us focus on the market for x and characterize a symmetric Cournot equilibrium. Aggregating over consumers, the total demand for x can be written

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