1 Market Experiments -a case of imperfect competition- Written by Khodori Eko Purwanto 3008 011 22.

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Presentation transcript:

1 Market Experiments -a case of imperfect competition- Written by Khodori Eko Purwanto

2 What… -Producer with market power- Small number of producers are competing in the market with big market share and power to control demand and supply. -Non standard products- The products do not have standardization in feature or composition, even from a producer. -High entry barriers- It is relatively difficult to enter into the market. Characteristics of imperfect competition -Low information- Producers and consumers can not obtain sufficient information about the product, price, and market.

3 Reported Data Analysis Survey Regulated price How… Seller Buyer

4 3,092.3 X + 51,736 = - 2,780.2 X + 94,209 X = Y = 74,101.14

5 Average price of seller = 74,929Average price of buyer = 73,357 Price range : ¥ 71,000 - ¥ 74,000 Number of deal : 8 deals

6 Conclusion… Interest: increase the taxable income from seller and buyer. -Government in imperfect competition- Require to push the profitable deal happened by market intervention. Based on the survey and analysis from Statistics Bureau: What the government should do? -Imposing the highest retail price for producers- In this case, the producers must sell their products below the highest price of ¥ 74,000. Producers can not sell the products more than ¥ 74,000. The government do not have to regulate the buyers’ price. It will be adjusted by itself due to the imposing of highest retail price.

7 ARIGATOU