Assalamualaikum sekalian

Cuti seminggu tu kann, kitorg tk jalan2 pun. Duk terperap dlm rumah je siapkan assignment.
We want to cry

Soo kita dh masuk week 10

Kita masuk chapter yang terakhir which is
CHAPTER 4 : MARKET STRUCTURE
MARKET STRUCTURE

Market

a
place where
buyer and
seller meets to
transact business

Market Structure
number and
distribution size of
buyer and
seller in the market.
PROFIT MAXIMIZATION IN PERFECT COMPETITION MARKET
Market equilibrium is
achieved when
marginal cost,
MC equals to
marginal revenue,
MR
MC = MR
Prices are
fixed in
perfect competition,
marginal revenue,
MR is the
same as at
price,
P.
P = AR = MR
PROFIT MAXIMIZATION IN IMPERFECT COMPETITION MARKET

Example

monopolistic competition, monopoly and oligopoly
Market Equilibrium is
achieved when
MR = MC
Price is
different based on
quantity supplied.
P = AR
Short run firm will enjoy three type of profit :
Supernormal profit
profit earned when total revenue,
TR is
greater than total cost,
TC
TR > TC

it is also when
price greater than
average total cost
P > ATC
Subnormal profit
losses because
price is
lower than
average cost
P < AC

Average total cost less than total cost
ATC < TC
Normal profit
breakeven price is
profit necessary for
firm to
stay in the
business.

It is when
total revenue equal to
total cost and
no profit or loss incurred.
TR = TC
PERFECT COMPETITION MARKET

Definition

where
many buyer and
seller sell homogenous product but
cannot control the
price.

Characteristics
Large number of
buyers
Buyers are
price takers.
Price is
fixed through the
forces of demand and supply.
Many seller in the
market
Sellers are
price takers.
Action of one firm will
affect the
other firm.
Product are
homogenous
Product are
same and
not differentiated.
Advertising is
absent in this market.
Free entry to
enter or
to exit market
New firm will
enter the
market .
Some firm will
leave market.
No restriction is
imposed.
Perfect knowledge
Know current prices of product.
Know the
market situation.

Short run profit in perfect competition market

Supernormal profit in perfect competition market

Normal profit in perfect competition

Subnormal profit in perfect competition

P/S: Ni video extra on perfect competition.
Thanks for watching !