Assume two firms have the same total costs of production. Firm A's average variable cost if $5 per unit and firm B's average variable cost is $7. Both firms have an average total cost of $8. If the current market price is $6 and remains unchanged what action will both firms take in the short run and the long run?

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The Answer of Assume two firms have the same total costs of production. Firm A's average variable cost if $5 per unit and firm B's average variable cost is $7. Both firms have an average total cost of $8. If the current market price is $6 and remains unchanged what action will both firms take in the short run and the long run?

Assume Two Firms Have the Same Total Costs of Production