PS5.4.8 relevant info:Despondent over the Red Sox's terrible season, Prof. Gruber decides to quit his day job and start a bicycle manufacturing firm in Kendall Square. As he starts looking into the bicycle manufacturing industry, he realizes it has some interesting features. First, he realizes that it operates as a competitive industry. Second, he finds that there are two technologies used by firms in the industry. Technology 1 uses solar power, and has a cost functionc1(q) = q + 4q^2 + 32 for q>0. Technology 2 uses electricity from the grid and is more efficient, with a cost functionC^2(q) = q +2q^2 _32 for q>0. Assume that we are in the long run, so firms using both technologies can shut and leave the market at 0 cost, so thatC(0) = 0 for both technologies.Now, suppose that the government of Massachusetts offers solar subsidies to 10 bicycle manufacturers. These subsidies are for $80 and the manufacturers receive these subsidies as long as they construct a bicycle manufacturing plant using the newly-invented solar technology (i.e. technology 1). There is free entry into the market for firms using tech 2. The long run price is 17The quantity produced by each firm using tech 1 is q1=2The quantity produced by each firm using tech 2 is q2=4In equilibrium N2= 30 firms in the market will be using tech 2

0.0/2.0 points [graded) The long run aggregate supply curve in this market (L.e. the total amount supplied by all firms as a function of price) depends on whether the price is less than 17. For p