Question: The table below shows fixed and variable costs per unit for an ice cream shop, Company A, and its local competitor, Company B. Rent

The table below shows fixed and variable costs per unit for an ice cream shop,

The table below shows fixed and variable costs per unit for an ice cream shop, "Company A," and its local competitor, "Company B." Rent and Utilities Ingredients Current Daily Output Company A Company B $1.50 per cone $1.25 per cone $1.00 per cone $0.75 per cone 1000 ice cream cones 700 ice cream cones Costs for rent and utilities are fixed by contract, and the two shops produce the same flavor of ice cream. The owner of Company A is considering lowering the price of its ice cream, starting a price war with Company B in an effort to grab market share from its competitor. Would it be a wise decision for Company A to enter a price war with Company B?

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