Question: The two side-by-side graphs are for two firms that between them supply all the organically grown avocados for a local area. With vigorous competition between

The two side-by-side graphs are for two firms that between them supply all the organically grown avocados for a local area. With vigorous competition between the firms, the price per pound has settled at a point where both firms are just breaking even. For each firm, the marginal cost (MC), average variable cost (AVC), and average total cost (ATC) curves are shown.

Price ($ per pound) Firm A 8 Price ($ per pound) Firm B 8 7.5 ATC 7.5 ATC 7 7 6.5 6 AVC 6.5 6 AVC 5.5 5.5 5 5 4.5 4.5 4 A 3.5 3.5 3 3 2.5 MC 2.5 2 2 MC 1.5 1.5 0.5 0.5 0 Quantity (thousands of pounds) Quantity (thousands of pounds)

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