3. The figure below shows the market for bread in the short-run and in the long-run. The horizontal axis is the number of loaves and the vertical axis is the price and cost in Euros (E). All bakeries are identical. Use the information given to determine whether each of the following statements regarding the short-run equilibrium is true or false. Isoprofits and cost curves for each bakery Market supply and demand 4.5 Isoprofit curves MC curve 4.5 Original 4.0 4.0 Demand supply 3.5 3.5 New 3.0 3.0 supply 2.5 2.5 2.0 2.0 1.5 AC curve 1.5 Long run supply 1.0 1.0 0.5 0.5 66 100 5,000 6.600 0.0 0.0 0 40 80 120 160 200 0 2,000 4.000 6,000 8,000 10,000 (a) In the short-run equilibrium, 66 bakeries produce 100 loaves each. (b) In the short-run equilibrium, each bakery makes an economic rent of E0.50. (c) The short-run equilibrium is defined as the equilibrium where the number of bakeries is exogenous (fixed/taken as given). (d) At point A, the bakeries have an incentive to drop the price to capture more of the market