Managerial Economics in a Global

Economy

Chapter 3
Demand Theory
Law of Demand

 There is an inverse relationship between the

price of a good and the quantity of the good
demanded per time period.

 Substitution Effect
 Income Effect
 Individual Consumer’s Demand
QdX = f(PX, I, PY, T)
QdX = quantity demanded of commodity X
by an individual per time period
PX = price per unit of commodity X
I = consumer’s income
PY = price of related (substitute or
complementary) commodity
T = tastes of the consumer
 QdX = f(PX, I, PY, T)

QdX/PX < 0
QdX/I > 0 if a good is normal
QdX/I < 0 if a good is inferior
QdX/PY > 0 if X and Y are substitutes
QdX/PY < 0 if X and Y are complements
Market Demand Curve

 Horizontal summation of demand curves of

individual consumers

 Bandwagon Effect (efek mengikuti konsumen

lain)
 Snob Effect (efek kesombongan)
Horizontal Summation: From
Individual to Market Demand
 Market Demand Function
QDX = f(PX, N, I, PY, T)
QDX = quantity demanded of commodity X
PX = price per unit of commodity X
N = number of consumers on the market
I = consumer income
PY = price of related (substitute or
complementary) commodity
T = consumer tastes
Demand Faced by a Firm
(Permintaan yang dihadapi Perusahaan)
 Market Structure
 Monopoly
 Perfect Competition
 Oligopoly (sedikit perusahaan dalam industri,
memproduksi barang yang homogen)
 Monopolistic Competition ( memiliki sifat monopoli dan
juga persaingan sempurna)

 Type of Good
 Durable Goods (barang tahan lama tetapi price tidak
stabil)
 Nondurable Goods
 Derived Demand (makin besar permintaan makin besar
permintaan firm terhadap input)
 Producers’ Goods (merupakan barang input)
Linear Demand Function
Fungsi permintaan yang dihadapi oleh perusahaan
QX = a0 + a1PX + a2N + a3I + a4PY + a5T

PX Intercept:
a0 + a2N + a3I + a4PY + a5T

Slope:
QX/PX = a1

QX
Price Elasticity of Demand

Point Definition Q / Q Q P
(Elastisitas pada titik EP   
P / P P Q
tertentu)

P
Linear Function EP  a1 
(Untuk kurva yang linier) Q
Price Elasticity of Demand

Q2  Q1 P2  P1
Arc Definition EP  
P2  P1 Q2  Q1

• Elastisitas permintaan terhadap harga antara

dua titik dalam kurva permintaan
• Digunakan untuk menghitung pergerakan
harga satu titik ke titik lain
Marginal Revenue and Price Elasticity
of Demand
TR  P.Q
TR
MR 
Q

 1 
MR  P 1  
 EP 
Marginal Revenue and Price Elasticity of
Demand
 Elastis , TR tidak berubah jika permintaannya
elastis uniter dan TR menurun jika
permintaan inelastis
 Jika permintaan elastis uniter, maka
penurunan harga kan menyebabkan
peningkatan kuantitas yang diminta dalam
jumlah yang sama
 Jika inelastis, maka penurunan harga akan
mengakibatkan peningkatan kuantitas yang
diminta dalam jumlah yang sama.
Marginal Revenue and Price Elasticity
of Demand

PX
Elastis
EP  1
EP  1 Elastis Uniter

EP  1 Inelastis

QX
MRX
Marginal Revenue, Total Revenue, and
Price Elasticity

TR MR>0 MR<0
EP  1 EP  1

QX
EP  1 MR=0
Income Elasticity of Demand

Q / Q Q I
Point Definition EI   
I / I I Q

Linear Function I
EI  a3 
Q
( dari pers. regresi pada persamaan 3.3)
Income Elasticity of Demand

Q2  Q1 I 2  I1
Arc Definition EI  
I 2  I1 Q2  Q1

Normal Good Inferior Good

EI  0 EI  0
Cross-Price Elasticity of Demand

QX / QX QX PY
Point Definition E XY   
PY / PY PY QX

PY
Linear Function E XY  a4 
QX
Cross-Price Elasticity of Demand

QX 2  QX 1 PY 2  PY 1
Arc Definition E XY  
PY 2  PY 1 QX 2  QX 1

Substitutes Complements
EXY  0 EXY  0
Other Factors Related to Demand
Theory
 International Convergence of Tastes
 Globalization of Markets
 Influence of International Preferences on Market
Demand
 Growth of Electronic Commerce
 Cost of Sales
 Supply Chains and Logistics
 Customer Relationship Management