Sabtu, 03 Mei 2014

Managerial Economics

Definition of Monopoly
Monopoly is a market situation where there is only one seller of a product , and no other products are becoming a replacement ( no substitutes ) of products traded practiced by the monopolist ( monopolist is the guy who runs a monopoly ) . The entire market is concerned , he mastered himself , in other words , in the market there are no other similar items , so that the monopolist does not need to consider the influence of other firm to its provisions concerning prices and quantities traded . Will remember that there is no monopoly in the market for competitors who do .
In perkonomian factual life , this kind of market monopoly very rarely do not get competition from other sellers . Although in a market , for example there is only one seller so there is no direct competitor of the other sellers , but sellers will face a single indirect competitors from other sellers mnghasilkan an alternative product that may not be perfect substitutes .
In this case we can take the example of PT . Railway Indonesi (PT KAI ) . PT . KAI is a body of State Owned Enterprises ( SOEs ) which organizes ground transportation services . PT . KAI does not face direct competition from other train companies because till this time there was no land transport service providers from the private rail though PT . KAI did not experience direct competition but PT . KAI will face indirect competition from other ground transportation services , for example the bus . Train Yogyakarta - Surabaya majors will not receive direct competition from other train . But it will face indirect competition from buses traveling Yogyakarat - Surabaya , and also travel .

     v  The characteristics of Monopoly
1.      In the market there is only one seller. Seller is entitled to retain the single market dimonoplinya, without any interference from any party.
2.      Types of goods produced no successor (no substitutes) "similar". Items available in the market do not have the same monopoly. For example, there is a monopoly of soap, then there is only one merchant traders soap and no other soap. but should not be construed that there is no other than the merchant traders soap, such as shoes, cigarettes, tapes, and so on, remain. For all the traders are not a good substitute for soap.
3.      There are barriers or obstacles (barriers) for a new company that will be entered in a monopoly market. Inhibiting factors, there are two kinds, namely technical and inhibiting factors inhibiting factors legal.

     v  The cause of Monopoly
1.      The presence of the ruler of raw materials (resources) specific. One particular type of product may only be generated using certain production factors. For example, the State Electricity Company (PLN). Because electricity is a vital need for society at large, then the control is handled by the government or its organizer as listed in the 1945 Constitution. Single company that owns the land or forest produce certain types of wood (carving for example) then the company has a monopoly position for the production of wood carving.
2.      The existence of a certain mastery of production techniques or technology has advantages. One producer who has engineering or technological advantage far above its competitors candidate, for a certain period can have a monopoly position. For example, mastery of technique photos, only first da at (Kodak), so until now people often refer to as kodak tustel. Similarly, IBM, to refer to a computer. As long as there is no production techniques that mimic, then market these items will be controlled by the monopolist.
3.      A participation of patent rights for a particular product (a juridical element). To obtain these patents should normally be preceded by the presence of an invention. The manufacturers are finding new ways of production or produce new types of products then sought patents on government. In this case the manufacturer to get a monopoly to produce the goods. For example, Graham Bell for the telephone and Thomas Edison for incandescent light bulbs. This patent rights granted by the justice department and have a certain validity period. During that time period then no one else can produce the same goods, because if it will be required to produce a court.
4.      The existence of a license (permission). This happens because the obtained institutional (institutional). For example, the monopoly held by PT Astra International, which is a monopoly fatherly assembly and sales of new cars TOYOTA.
5.      The existence of naturally acquired monopoly (no need for patent rights or licenses). For example, because of the broad market is too large so it can not be served by more than one seller. Entry of new firms will not usually advantageous, because the old company that holds a monopoly already have wider experience and have non-material wealth or good will of the community. Therefore, new entrants will be able to survive if it has a more efficient technology.

     v  Price and Output in Monopolistic Market
The number of output offered by employers depends on the optimum point attempt. The decision to set the output and price in the monopoly market is basically the same as in a perfectly competitive market. So to maximize the difference between total revenue (TR) and total cost of short-term (SRTC). Or the same as looking for quantity production will equate the marginal cost (marginal cost) with marginal revenue (marginal Revenue), or MC = MR.
In the government laws that regulate the activities of company-parusahaan there are some rules that will realize the power of monopoly. Regulations as it is :
1.      Patent and copyright regulations
Rapid economic development is mainly cause by technological developments. To develop the necessary technology sometimes take years and cost enormous. Therefore, activities and expenditures to develop the company's technology will not be performed if the results of their efforts easily copied or plagiarized by another company.
In order for businesses to develop technology with the aim of creating new goods would give the advantage to the company, the government must prohibit and punish the tracing activities. Copyright or copy rights is another form of copyright is a legal guarantee to avoid plagiarism.

2.      Exclusive operating rights
If the economies of scale obtained only after the company reached a very high level of production, the interests of the general public will be maximized if companies are given the opportunity to enjoy the economies of scale, and at the same time required to sell their products at low prices.

CONCLUSION :
Market monopoly is a market form in which there is only one company alone. And these companies produce goods that do not have a very close substitute goods.
The characteristics include industry market monopoly is one company, do not have a replacement item that is similar, there is no possibility to enter the industry, can affect the pricing, promotional advertising is less necessary.
Factors that lead to a monopoly, among others, the monopolist has a unique resource and is not owned by another company, the company's monopoly in general can enjoy economies of scale (economies of scale) up to a very high level of production, monopolies form and evolve through legislation - laws that give the government monopoly to the company.
Of the characteristics and factors it can be concluded that the monopoly tends to worsen the distribution of income in society.

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