In a similar thread (which I didn't bother to link right now - maybe I will later), experienced growers mentioned that wider pots usually could sustain a larger plant for a given soil volume. There are advantages/disadvantages though; it seems plants in wider pots need more attention to make sure they aren't being over/underwatered since the soil is more prone to water loss through evaporation.
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In regards to the second question, they can live awhile. I've heard of a few over 7 years old. It would seem the oldest are usually 10-15 years old under ideal circumstances. Propagating from cuttings can extend this.
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You can trim dead stems at pretty much any time. As long as you allow a recovery period (to grow new leaves/branches) between pruning sessions you can extensively trim pepper plants as you find necessary. Bonchi plants are the product of heavy selective pruning and they do fine.
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