1. nuhfil hanani : web site : www.nuhfil.com, email : nuhfil@yahoo.com BAB 10 Persaingan sempurna Perfect competition

2. nuhfil hanani : web site : www.nuhfil.com, email : nuhfil@yahoo.com Pasar Persaingan Sempurna u many buyers and sellers, u identical (also known as homogeneous) products, u no barriers to either entry or exit, and u buyers and sellers have perfect information.

3. nuhfil hanani : web site : www.nuhfil.com, email : nuhfil@yahoo.com Profit maximization assumption Firms act to maximize profit (  ). Profit = total revenue – total cost = PQ – FC – VC

4. nuhfil hanani : web site : www.nuhfil.com, email : nuhfil@yahoo.com Profit maximization example QTRTC  MRMC  003(3)6 1651624 21284633 318126642 424177651 530237660 63630667(1) 74238468(2) 84847169(3)

5. nuhfil hanani : web site : www.nuhfil.com, email : nuhfil@yahoo.com Rule for profit maximization If MC is rising, produce up to the point at which MC = MR.

6. nuhfil hanani : web site : www.nuhfil.com, email : nuhfil@yahoo.com Figure 1 Profit Maximization for a Competitive Firm Copyright © 2004 South-Western Quantity 0 Costs and Revenue MC ATC AVC MC 1 Q 1 2 Q 2 The firm maximizes profit by producing the quantity at which marginal cost equals marginal revenue. Q MAX P = MR 1 = 2 P = AR = MR

7. nuhfil hanani : web site : www.nuhfil.com, email : nuhfil@yahoo.com Figure 2 Marginal Cost as the Competitive Firm’s Supply Curve Copyright © 2004 South-Western Quantity 0 Price MC ATC AVC P 1 Q 1 P 2 Q 2 This section of the firm’s MC curve is also the firm’s supply curve.

8. nuhfil hanani : web site : www.nuhfil.com, email : nuhfil@yahoo.com Figure 3 The Competitive Firm’s Short Run Supply Curve Copyright © 2004 South-Western MC Quantity ATC AVC 0 Costs Firm shuts down if P < AVC Firm’s short-run supply 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.

9. nuhfil hanani : web site : www.nuhfil.com, email : nuhfil@yahoo.com 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.

10. nuhfil hanani : web site : www.nuhfil.com, email : nuhfil@yahoo.com Figure 4 The Competitive Firm’s Long-Run Supply Curve Copyright © 2004 South-Western MC = long-run S Firm exits if P < ATC Quantity ATC 0 Costs Firm’s long-run supply curve Firm enters if P > ATC

11. nuhfil hanani : web site : www.nuhfil.com, email : nuhfil@yahoo.com Figure 5 Profit as the Area between Price and Average Total Cost Copyright © 2004 South-Western (a) A Firm with Profits Quantity 0 Price P=AR= MR ATCMC P ATC Q (profit-maximizing quantity) Profit

12. nuhfil hanani : web site : www.nuhfil.com, email : nuhfil@yahoo.com Figure 5 Profit as the Area between Price and Average Total Cost Copyright © 2004 South-Western (b) A Firm with Losses Quantity 0 Price ATCMC (loss-minimizing quantity) P=AR= MR P ATC Q Loss

13. nuhfil hanani : web site : www.nuhfil.com, email : nuhfil@yahoo.com Figure 6 Market Supply with a Fixed Number of Firms Copyright © 2004 South-Western (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

14. nuhfil hanani : web site : www.nuhfil.com, email : nuhfil@yahoo.com Figure 7 Market Supply with Entry and Exit Copyright © 2004 South-Western (a) Firm’s Zero-Profit Condition Quantity (firm) 0 Price (b) Market Supply Quantity (market) Price 0 P = minimum ATC Supply MC ATC

15. nuhfil hanani : web site : www.nuhfil.com, email : nuhfil@yahoo.com 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 P 1 ATC Long-run supply P 1 1 Q A MC

16. nuhfil hanani : web site : www.nuhfil.com, email : nuhfil@yahoo.com Figure 8 An Increase in Demand in the Short Run and Long Run Copyright © 2004 South-Western Market Firm (b) Short-Run Response Quantity (firm) 0 Price MC ATC Profit P 1 Quantity (market) Long-run supply Price 0 D 1 D 2 P 1 S 1 P 2 Q 1 A Q 2 P 2 B

17. nuhfil hanani : web site : www.nuhfil.com, email : nuhfil@yahoo.com Figure 8 An Increase in Demand in the Short Run and Long Run Copyright © 2004 South-Western P 1 Firm (c) Long-Run Response Quantity (firm) 0 Price MC ATC Market Quantity (market) Price 0 P 1 P 2 Q 1 Q 2 Long-run supply B D 1 D 2 S 1 A S 2 Q 3 C