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Consider the market for baseball caps. There are many producers in this market, and we assume that the technology of production is identical among these
Consider the market for baseball caps. There are many producers in this market, and we assume that the technology of production is identical among these producers. A typical producer in this market has a U-shaped average variable cost curve with the minimum average variable cost at $2.50, and a U-shaped average total cost curve with the minimum average total cost at $3.50. What does the market supply of baseball caps look like in the long run? Choose one: A. an upward-sloping curve that starts at the price of $3.50, with zero supply at a price less than $3.50 B. a horizontal line at a price of $3.50 C. an upward-sloping curve that starts at the price of zero D. an upward-sloping curve that starts at the price of $2.50, with zero supply at a price less than $2.50
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