The industry in Figure 13P-6 consists of many firms with identical cost structures, and the industry experiences constant returns to scale. Consider a change in demand from D1 to D2 which increases price from P1 to P2 in the short run. [LO 13.8]
a. Draw the new short-run supply curve after the market adjusts and returns to long-run equilibrium.
b. Draw the long-run supply curve.