A competitive firm's cost of producing q units of output is C = 18 + 4q + q^2 Its corresponding marginal cost is MC = 4 + 2q. a. The firm faces a market price p = $24. Create a spreadsheet with q = 0, 1, 2, ..... 15, where the columns are q, R, C, VC, AVC, MC, and profit. Determine the profit-maximizing output for the firm and the corresponding profit. Should the firm produce this level of output or should it shut down? Explain. b. Suppose the competitive price declines to p = $12. Repeat the calculations of part a. Should the firm shut down?

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a R p x q 24 x q C 18 4q q 2 VC 4q q 2 AVC VCq 4 q MC dCdq 4 2q Profit R C q R C VC AVC MC Profit 0 ... View the full answer