EARTH SUMMIT July 3

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Market Experiments -a case of imperfect
competition-
Written by Khodori Eko Purwanto 3008 011 22
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What
Characteristics of imperfect competition
-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.
-Low information- Producers and consumers can not
obtain sufficient information about the product,
price, and market.
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How
Seller
52 65 65 71 76 100 90
70 62 70 70 80 83 95
Buyer
90 70 80 65 79.99 50 65
95 75 81 65 78 73 60
Regulated price
Reported Data
Survey
Analysis
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How
3,092.3 X 51,736 - 2,780.2 X 94,209
X 7.2325 Y 74,101.14
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How
Average price of seller 74,929
Average price of buyer 73,357
Price range 71,000 - 74,000
Number of deal 8 deals
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Conclusion
-Government in imperfect competition-
Interest increase the taxable income from seller
and buyer.
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.
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• ARIGATOU