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Conigan Box Company produces cardboard boxes that are sold in bundles of 1000 boxes. The market is highly competitive, with boxes currently selling for $100 per thousand. Conigan's total and marginal cost curves are: TC = 3,000,000 + 0.001Q2 MC = 0.002Q where Q is measured in thousand box bundles per year.
1. Calculate Conigan's profit maximizing quantity. Is the firm earning a profit?
2. Analyze Conigan's position in terms of the shutdown condition. Should Conigan operate or shut down in the short run?
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