QUESTIOn:

A painter operates in a perfectly competitive industry, and its total costs are given by:

TC(q)=3q2+18q

where q denotes the number of painting jobs done.

1. What is the firm's marginal cost?

2. What is the firm's average costs? Does the firm have increasing, constant, or decreasing returns to scale?

3. Graph the marginal and average cost curves on the same set of axes.

4. What is the price beneath which this painter would choose to shut down

5. If the market price of a painting is $102 (!), how many jobs will this firm do? What is the firm's average cost at that level of output? How does it compare to the market price

6. Find an expression that expresses this firm's profits as a function of the market price ((p)). Your answer should depend on (p) and otherwise contain only numerical constants.

Hint: your answer will be a piecewise function, and you will need to solve for supply as a function of the market price.