Given the cost function in the following table for Simon, a housepainter in a competitive local market, answer the questions that follow. (You may want to calculate average cost.)
Number of Rooms Painted per Week Total Cost
0 …………………………………………………$100
1 …………………………………………………$120
2 …………………………………………………$125
3 …………………………………………………$145
4 …………………………………………………$200
5 …………………………………………………$300
6 …………………………………………………$460
What is the minimum price per room at which Simon would be earning positive economic profit? At prices below this price, what will Simon’s long run plan be?