A perfectly competitive firm has variable costs given by VC=q^2 and fixed costs of FC=$1. Calculate output and profits if the price were P=$4.

A perfectly competitive firm has variable costs given by VC=q^2 and fixed costs of FC=$1. Calculate output and profits if the price were P=$4. Explain whether this firm should shutdown if price falls to P=$1. Provide a labelled diagram for MC, ATC, AFC and AVC.