In a recent legal battle between two manufacturers of pocket calculators, Company B accused Company A of selling $10$ million sophisticated calculators at a price of $$12,$ which A allegedly knew was too low to cover costs. B claimed that A was pursuing this course simply to drive B out of business. At first, Company A$\text{'}$s record, as revealed to the court, appeared to confirm B$\text{'}$s accusations. The cost of material, labor and advertising, and other direct costs of the calculator came to $$10\mathrm{.}30$ per calculator. Company A$\text{'}$s accountants also assigned to this product its share of the company's annual expenditure on overhead$-$ such items such as general administration, research, and the like$-$ which amounted to $$4\mathrm{.}25$ per calculator.

The $$12$ price clearly did not cover the $$14\mathrm{.}55$ cost attributed to each calculator. Yet economists representing the Company A were able to convince the court that manufacturing the calculator was a profitable activity for Company A$,$ so there was no bias on which to conclude that its only purpose was to destroy $B.$

Why did company A win? and provide solutions