I’m studying for my Economics class and need an explanation.

Q1. Firms in oligopoly must constantly think in terms of how other firms in the industry will react to whatever they do. Why do they have to do this? Why is it that firms in perfect competition and in monopoly don’t have to worry about how other firms will react? (5 Marks)

Q2. Governments are frequently tempted to introduce price ceilings in markets. Use an example to explain why this is not such a good idea, at least when markets are competitive. Give some ideas as to what the government could do instead in order to help consumers in these markets. (5 Marks)

Q3. If perfectly competitive firms are price takers, and monopolistic, monopolistic competitive, and oligopolistic firms are price searchers, then it follows that three times as many firms in the real world are price searchers than are price takers. Do you agree or disagree? Explain your answer. (5 Marks)

Q4. Critically analyze the following statement with views of your own:

“There is no substitute for an airline pilot: Someone has to fly the plane. Therefore, an increase in the wage of airline pilots will not change the number of pilots used by the airlines.”(5 Marks)

Note: For all your answers support your views/opinions with at least two to three scholarly references, and a word count of 400-500 words for each answer.

Assignment 2: Market Forms

For this assignment you will do a significant portion of work in MS Excel and import it into an MS Word document for submission. You will use the data below to address Price and Output decisions faced by firms that are not in pure competition. Some numbers may be rounded.

Address the following:

1. Complete Table-1. Summarize your calculations.
2. Prepare a graph showing:
   • Average Fixed Costs
   • Average Variable Costs
   • Average Total Costs
   • Marginal Revenue
   • Marginal Costs 
3. Using the data in the table and on your graph, explain the profit maximizing, or loss minimizing level of output.
4. Define a normal profit and an economic profit. Are normal profits being earned in this example? Are economic profits present for this firm in this example?  Explain your answers.
5. Given the data in the table and the graph, what type of market structure could this be in the short run? Explain your answers.
6. If the data in Table-1 represents the long run, what type of firm must this data represent? Explain your answers.