3.12 A Christmas tree seller has a cost function C = 6,860 + (pT + t + 7/12)q + 37/27,000,000q3, where pT = $11.50 is the wholesale price of each tree and t = $2.00 is the shipping price per tree.

What is the seller’s marginal cost function? What is the shutdown price? What is the seller’s short-run supply function? If the seller’s supply curve is S(q, t), what is 0(q, t)/ 0t? Evaluate it at pT = $11.50 and t = $2.00. (Hint: See Solved Problem 8.2) M