Managing in Competitive,

Monopolistic and Monopolistically

Competitive Market

Nugraha Setyawidaputra
Putri Amandhari
6
th
May 2014
PRA MBA C 64

HEADLINE: Starbucks Enters Tea-Loving
India
Persaingan
Sempurna
Managing in Competitive, Monopolistic and Monopolistically Competitive Market
PERSAINGAN SEMPURNA
Banyak pembeli dan penjual
Barang yang dijual serupa
Pembeli dan penjual memiliki Informasi yang
lengkap
Tidak ada biaya transaksi
Bebas keluar masuk
8-4
Unrealistic? Why Learn?
Many small businesses are price-takers, and
decision rules for such firms are similar to those of
perfectly competitive firms.
It is a useful benchmark.
Explains why governments oppose monopolies.
Illuminates the danger to managers of
competitive environments.
Importance of product differentiation.
Sustainable advantage.
8-5
Kurva Permintaan
Firm
Q
f

$
D
f

Market
Q
M

$
D
S
P
e

Profit-Maximizing
MR = MC.
karena, MR = P,
P = MC untuk memaksimalkan profit
8-7
$
Q
f

ATC
MC
P
e
= D
f
= MR
Q
f*

ATC
P
e

Max Profit P = MC

profit

loss
$
Q
ATC
AVC
Q
*

P
e

Short run-operating loss
MC
ATC(Q
*
)
Shut down decision
$
Q
ATC
AVC
MC
P
e
= D
f
= MR
Q
*

ATC
P
e

Loss if shut
down

AVC
Loss if produce

Shutdown Decision Rule
Decision rule:
Sebuah perusahaan pada pasar persaingan
sempurna harus menutup usahanya saat P < min
AVC.
Sebuah perusahaan pada pasar persaingan
sempurna dapat melanjutkan usahanya P min
AVC.
8-11
$
Q
f

AVC
MC
Q0
P0
Short-Run Supply Curve: MC Diatas
Min AVC
P1
Q1
Market Supply Curve
Individual firm
10
1
Q
P
12
500
8-13
Market
Effect of Entry and Exit
Firm
Q
f

$
D
Market
Q
M

$
D
S
P
e

S1
P1 D
1

Entry
Exit
S2
D
2

P2
MONOPOLIS
TIC
COMPETITIO
N
Managing in Competitive, Monopolistic and Monopolistically Competitive Market
Banyak penjual dan pembeli
Setiap perusahaan memproduksi barang yang berbeda
Bebas keluar masuk pasar
CONDITION FOR MONOPOLISTIC
COMPETITION
PROFIT MAXIMIZATION
Kurva permintaan pasar persaingan monopolistik lebih
elastis dari pasar monopoli

Kondisi ini, dengan asumsi free entry dan free exit akan
mendorong masuknya kompetitor baru


Perusahaan akan memaksimumkan profit saat
MR (Q*) = MC (Q*)
Charge the price on the demand curve that corresponds to that quantity.
Profit Maximization under
Monopolistic Competition
$
ATC
MC
D
MR
Q
M

P
M

Profit
ATC
Quantity of Brand X
8-17
Konsekuensi kompetitor baru adalah turunnya
permintaan terhadap perusahaan incumbent
Jika hal ini terus berlangsung, profit perusahaan
incumbent akan tergerus sampai profit ekonominya=0

Pilihan bagi perusahaan incumbent:
efisiensi biaya atau meningkatkan permintaan dengan
melakukan inovasi, keluar atau masuk industri
memperbesar atau mengurangi skala perusahaannya

$
ATC
MC
D
MR
Q*
P*
Quantity of Brand
X
MR
1

D
1

Entry
Due to entry of new firms
selling other brands
Effect of Entry on a Monopolistically
Competitive Firms Demand
8-18
LONG-RUN EQUILIBRIUM
P > MC
P = ATC > minimum of average cost

Long-Run Equilibrium
Long-run equilibrium terjadi pada sebuah pasar
kompetitif saat:
Economic profit adalah nol, jadi perusahan tidak keluar
dan juga tidak masuk industri.
Long-run average cost berada pada nilai minimum, jadi
perusahaan tidak lagi mengubah ukuran perusahaan.


$
AC
MC
D
MR
Q*
P*
Quantity of Brand
X
Long Run Monopolistically
Competitive Equilibrium
Long-Run Monopolistic Competition
8-19
Summary of Logic
Short run profits leads to entry.
Entry increases market supply, drives down
the market price, increases the market
quantity.
Demand for individual firms product shifts
down.
Firm reduces output to maximize profit.
Long run profits are zero.
OPTIMAL ADVERTISING DECISION

Incremental Cost of Advertising
Incremental Revenue
Formula


A = firm expenditures on advertising
R = PQ denotes the dollar value of the firm sales
EQP = own price elasticity of demand for firm product (extreme
case dia infinite)
EQA advertising elasticity of demand for the firm product
ANSWERING THE HEADLINE