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5) For this question, assume that NutraSweet and HSC face the same Average Total Cost and Average Variable Cost Curves.

5) For this question, assume that NutraSweet and HSC face the same Average Total Cost and Average Variable Cost Curves. In other words, assume that the efficiency of their processes given a certain quantity is the same. Assume further that fixed costs are sunk and that HSC has yet to spend these fixed costs. Explain how the difference between average total cost per pound and average variable cost per pound could potentially impact HSC's entry decision and NutraSweet's response to HSC's entry threat. (Space constraint: three sentences.) (3 points)
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With the entry of HSC into the sweet making industry, the average total cost will
decline as more products will be placed into the market. As such, Nutra-sweet might
respond to HSC’s entry threat...

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