Question : Suppose the price of bagels in Allentown currently $0.90 per
Suppose the price of bagels in Allentown is currently $0.90 per bagel. There are 10 low-cost bakeries and 10 high-cost bakeries that can produce bagels, each of which has the supply function (These individual supply functions apply in the short run and the long run.) Which bakeries will be active when the price is $0.90? Only low-cost bakeries will be active If the price rises to $1.40, what will be the market supply in the short run? What will be the market supply in the long run?