MONOPOLISTIC COMPETITION AND OLIGOPOLY

Tedy Herlambang

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# MONOPOLISTIC COMPETITION AND OLIGOPOLY

## Mikroekonomi: Materi Minggu ke 12

### Tedy Herlambang .small[ ]

[ bangtedy.github.io](https://bangtedy.github.io)

[ @t_hlb](https://twitter.com/t_hlb)

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# LEARNING OUTCOMES

After studying this chapter, you will be able to

- Outline the monopolistic and competitive elements of monopolistic competition
- Describe the sources of oligopoly and explain why some industries become oligopolies
- Explain why predicting oligopoly behavior is so difficult
- Summarize the similarities and differences between an oligopoly and perfect competition in terms of price, output, and long-run profitability
 
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# INTRODUCTION

- Perfect competition and monopoly are extreme market structures. 
- Under perfect competition, many suppliers offer an identical product and, in the long run, entry and exit erase economic profit. 
- A monopolist supplies a product with no close substitutes in a market where 
natural or artificial barriers keep out would-be competitors, so a monopolist can earn economic profit in the long run. 
- These polar market structures are logically appealing and offer a useful 
description of some industries observed in the economy.
- But most firms fit into neither market structure. 
- This chapter examines the two remaining market structures that together 
account for most firms in the economy.

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class: middle, center, inverse

# # MONOPOLISTIC COMPETITION
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> A market structure with many firms selling products that are substitutes but different enough that each firm’s demand curve slopes downward; firm entry is 
relatively easy

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# Product Differentiation

- Physical Differences
- Location
- Services
- Product Image

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# Short-Run Profit Maximization or Loss Minimization
- Marginal Revenue Equals Marginal Cost
- Maximizing Profit or Minimizing Loss in the Short Run

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# Zero Economic Profit in the Long Run

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# Monopolistic Competition and Perfect Competition Compared

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# OLIGOPOLY
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.font70[A single study is never the end of the story; multiple studies are 
needed before we can reach defensible conclusions about social phenomena.]

**Special thanks to**

Mahasiswa Agribisnis Angkatan '21
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