(a) A perfect competitive market in economics is a theoretical market structure where numerous buyers and sellers trade homogeneous products, with no single participant able to influence prices, ensuring efficient resource allocation through free entry/exit and perfect information.

(b) Three features of perfect competition:

• Large number of buyers and sellers: No individual can control market price; firms are price takers (e.g., Ghanaian cocoa farmers in global markets).
• Homogeneous products: Goods are identical, leading to perfect substitutability and competition solely on price.
• Free entry and exit: No barriers, allowing firms to enter profitable markets or exit unprofitable ones, ensuring long-run zero economic profits.

(c) Profit = Total Revenue – Total Cost = (P × QS) – (ATC × QS) = (12 × 25) – (13 × 25) = 300 – 325 = -25 GHC (loss).

The firm should not shut down in the short run because P (12) > AVC (10), covering variable costs and contributing to fixed costs. Shutting down would incur full fixed costs (ATC – AVC = 3 per unit × 25 = 75 GHC loss), worse than the current 25 GHC loss.

(d) Oligopoly is a market structure characterized by a few dominant firms interdependent in decision-making, often leading to strategic behaviors like price rigidity or collusion, with barriers to entry (e.g., Ghana’s telecom sector with MTN and Vodafone).

(e) A price ceiling is a government-imposed maximum price below equilibrium to make goods affordable.

Two effects:

• Shortages: Quantity demanded exceeds supplied, leading to black markets or rationing (e.g., rent controls causing housing shortages).
• Reduced quality: Suppliers cut costs to maintain profits, lowering product standards.