Assume that the manufacturing of plastic (PVC) windows is a perfectly competitive industry. The market demand for plastic windows is described by a linear demand function: Q = (6000 -50P)/9. There are 50 manufacturers of plastic windows. Each manufacturer has the same production costs, described by the function TC=50+q2+10q. Answer the next questions:
Describe the equilibrium in the short run.
Describe the new short run equilibrium if every producer needs to pay 40 ("protection money") to mafia every period
Describe the new short run equilibrium if every producer needs to pay 4 from every window to local bureaucrats (“safety certification" fee).