Nuhfil hanani : web site : , email : [email protected] BAB 10 Persaingan sempurna Perfect competition.

nuhfil hanani : web site : www.nuhfil.com, email :

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BAB BAB 10 10Persaingan sempurna Perfect competition


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Pasar Persaingan Sempurna

many buyers and sellers, identical (also known as

homogeneous) products, no barriers to either entry or exit, and buyers and sellers have perfect

information.


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Profit maximization assumption

Firms act to maximize profit ( ).Profit = total revenue – total cost

= PQ – FC – VC


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Profit maximization example

Q TR TC MR MC

0 0 3 (3) 6

1 6 5 1 6 2 4

2 12 8 4 6 3 3

3 18 12 6 6 4 2

4 24 17 7 6 5 1

5 30 23 7 6 6 0

6 36 30 6 6 7 (1)

7 42 38 4 6 8 (2)

8 48 47 1 6 9 (3)


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Rule for profit maximization

If MC is rising, produce up to the point at which MC = MR.


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Figure 1 Profit Maximization for a Competitive Firm

Copyright © 2004 South-Western

Quantity0

Costsand

Revenue

MC

ATC

AVC

MC1

Q1

MC2

Q2

The firm maximizesprofit by producing the quantity at whichmarginal cost equalsmarginal revenue.

QMAX

P = MR1 = MR2 P = AR = MR


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Figure 2 Marginal Cost as the Competitive Firm’s Supply Curve


Quantity0

Price

MC

ATC

AVC

P1

Q1

P2

Q2

This section of thefirm’s MC curve isalso the firm’s supplycurve.


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Figure 3 The Competitive Firm’s Short Run Supply Curve


MC

Quantity

ATC

AVC

0

Costs

Firmshutsdown ifP< AVC

Firm’s short-runsupply curve

If P > AVC, firm will continue to produce in the short run.

If P > ATC, the firm will continue to produce at a profit.


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Shutdown vs. Exit

A shutdown refers to a short-run decision not to produce anything during a specific period of time.

Exit refers to a long-run decision to leave the market.


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Figure 4 The Competitive Firm’s Long-Run Supply Curve


MC = long-run S

Firmexits ifP < ATC

Quantity

ATC

0

CostsFirm’s long-runsupply curve

Firmenters ifP > ATC


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Figure 5 Profit as the Area between Price and Average Total Cost


(a) A Firm with Profits

Quantity0

Price

P = AR = MR

ATCMC

P

ATC

Q(profit-maximizing quantity)

Profit


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Figure 5 Profit as the Area between Price and Average Total Cost


(b) A Firm with Losses

Quantity0

Price

ATCMC

(loss-minimizing quantity)

P = AR = MRP

ATC

Q

Loss


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Figure 6 Market Supply with a Fixed Number of Firms


(a) Individual Firm Supply

Quantity (firm)0

Price

MC

1.00

100

$2.00

200

(b) Market Supply

Quantity (market)0

Price

Supply

1.00

100,000

$2.00

200,000


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Figure 7 Market Supply with Entry and Exit


(a) Firm’s Zero-Profit Condition

Quantity (firm)0

Price

(b) Market Supply

Quantity (market)

Price

0

P = minimumATC

Supply

MC

ATC


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Figure 8 An Increase in Demand in the Short Run and Long Run

Firm

(a) Initial Condition

Quantity (firm)0

Price

Market

Quantity (market)

Price

0

DDemand, 1

SShort-run supply, 1

P1

ATC

Long-runsupply

P1

1Q

A

MC


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MarketFirm

(b) Short-Run Response

Quantity (firm)0

Price

MC ATCProfit

P1

Quantity (market)

Long-runsupply

Price

0

D1

D2

P1

S1

P2

Q1

A

Q2

P2

B


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P1

Firm

(c) Long-Run Response

Quantity (firm)0

Price

MC ATC

Market

Quantity (market)

Price

0

P1

P2

Q1 Q2

Long-runsupply

B

D1

D2

S1

A

S2

Q3

C

Nuhfil hanani : web site : , email : [email protected] BAB 10 Persaingan sempurna Perfect competition.

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