Machshirin, Chapter 2, Mishnah 8. This stretch of the chapter deals with a city inhabited by both Jews and non-Jews, where something is found and no one knows who left it. The Mishnah resolves such questions by following the majority, and here it applies that approach to two finds: a lost object and a loaf of bread.
A lost object
"Matza bo metzia": someone comes upon a lost article in this city. The first case is "im rov nochrim," where gentiles make up most of the inhabitants, and there the halacha is "eino tzarich lehachriz," no public proclamation is made. The mitzvah of hashavas aveidah governs only a fellow Jew's property, and the odds point to one of the gentile majority as the owner, so nothing obligates the finder to publicize what he picked up.
Now the reverse: "Ve'im rov Yisroel," where Jews form the larger part of the townspeople, and the ruling is "tzarich lehachriz." The assumption runs in the opposite direction, that the article slipped from a Jew, and its owner deserves the chance to identify it and take it back, so the finder is bound to announce the find.
"Mechtza lemechtza tzarich lehachriz." Where the population is evenly split, he is likewise obligated to proclaim it. The Jewish half is not swallowed up in a larger non-Jewish body, so the object may very well belong to a Jew, and the finder therefore bears the obligation to announce it.
A loaf of bread
"Matza bo pas." The next case is a loaf discovered in that same mixed settlement. Standing behind the question is the Sages' enactment against pas akum, a loaf produced by a gentile baker, which they placed off limits. So an ordinary loaf surfaces in a place populated by Jews together with gentiles: is it fit to be eaten?
"Holchin achar rov hanachtomin." We follow the majority of the bakers. It would make little sense to count the general population, since the question is not who lives there but who bakes there. So we determine the makeup of the city's bakers. If most of them are Jews, the loaf may be presumed permitted and there is no issue of pas akum. If most of them are non-Jews, we must assume the loaf is pas akum and it may not be eaten.
"Ve'im hoysa pas isa," and the Rav identifies pas isa with pas nekiah, a loaf of fine sifted flour. Because such bread is a specialty item, the ruling is "holchin achar rov," we go after the majority, and specifically after the "ochlei pas isa": not the bakers of the place as a group, but those residents who actually consume this refined bread. Should Jews be the greater part of the people eating it, the loaf is presumed of Jewish baking and permitted; should gentiles predominate among them, it carries the status of pas akum.
"Reb Yehuda omer." Rebbi Yehuda takes up the opposite sort of loaf, "im hoysa pas kibar," coarse dark bread of unsifted flour, and his ruling is "holchin achar rov," we go after the majority of the "ochlei pas kibar," the people who habitually eat that kind of bread.
For anyone wondering where the argument lies here, it does not appear that Rebbi Yehuda is disputing anything. Most understand that he is simply supplying a parallel case, and that this is not a machlokes at all. The Rambam, however, seems to read Rebbi Yehuda as taking issue with the first Tanna, so that there is some measure of disagreement between them. We will leave that discussion aside.
A second reading of the Mishnah
Worth noting: the Rav preserves a completely different way of reading this portion of the Mishnah. On that reading, the subject is not the prohibition on gentile-baked loaves at all, but tumah and taharah, and the doubt is whether the loaf should be presumed to have come from an am ha'aretz, one who is lax in these halachos. The Rav cites it as an alternative, though the explanation given above is the accepted one.