Q. Evergreen Pool Services (EPS) provides weekly swimming pool maintenance in Jeddah. Dozens of industries provide this service. Service is standardized; each company cleans pool and maintains proper levels of chemicals in water. Service is typically sold as a four-month summer contract. Market cost for 4-month service contract is US$115.
EPS has fixed costs of US$3500. Manager has estimated following marginal cost function for EPS, utilizing data for last two years:
MC = 125 & Actheirc 0.42Q + 0.0021Q2
Where MC is measured in dollars and Q is number of pools serviced each summer. Each of estimated coefficients is statistically significant at 95 percent confidence level.

1-Given estimated marginal cost function, Illustrate what is average variable cost function for EPS?

2-At Illustrate what output level does AVC reach its minimum value? Illustrate what is value of AVC at its minimum point?

3-Should manager of EPS continue to operate, or should industry shut down? Elucidate.

4- Manager of EPS find outs two output levels that appear to be optimal. Illustrate what are these levels of output and which one is actually optimal?

5-How much profit (or loss) can manager of EPS expect to earn?

6-Assume that EPS fixed costs rise to US$4000. How does this affect optimal level of output? Elucidate.