- 20 Marks
EIB – APR 2024 – L1 – Q3 – Market Structures and Price Controls
Defines perfect competition, lists features, calculates profit and shutdown, defines oligopoly, explains price ceiling effects.
Question
(a) What is a Perfect Competitive Market in Economics? [2 marks]
(b) Identify three (3) features of Perfect Competition. [6 marks]
(c) Assuming a competitive firm’s Price (P) is GHC12, Average Total Cost (ATC) is GHC13, Average Variable Cost (AVC) is GHC10, and Quantity Supplied (QS) is 25. Calculate the firm’s Profit level and explain why it should or should not shut down in the short run. [6 marks]
(d) Explain the term Oligopoly as a Market Structure. [2 marks]
(e) What is Price Ceiling? Mention two (2) effects of Price Ceiling? [4 marks]
(Total: 20 marks)
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