Suppose that a firm in a perfectly competitive market has the following cost curve:

C(q) = 10 + 3q+q^2

The market price is 9.

a) What is the profit at the profit maximising level of output (assuming non-zero production)? Show your working. (4 marks)

b) In the short run, should the firm continue to produce, or shut down? Explain. (4 marks)