Tri Nugraha Ramadhani (13313193)

Development Economics

Imperfect Market in Indonesia

A long time ago since there is a life on the earth, human always try to fulfill their
needs. Before the human know about buying and selling system, they change their goods with
other people who has a necessary goods for them. This system is called barter. Because
sometimes the changed good is not equal with the value which the good they gain. As the
time goes by, human found a unity measurement of a value of goods which is money. After
they know money system, the barter system is no longer valid. In buying and selling system
there are producer and consumer which is market. As the time goes by, the market flourish in
many different types of market. They are perfect market competition and imperfect market
competition. Focus on imperfect market, imperfect market means the market which is not
organized perfectly, one people or group that control the market and the price and one or
some buyers that control the market and the price. Because a lot of people who want to
control the market, imperfect market divided into different types. They are monopoly market,
oligopoly market and monopolistic market. On this paper, the writer try to describe the
monopoly market and monopolistic market in Indonesia.
Monopoly market is a condition where there is only one power or one seller who can
possess all the supply with the result that there is no other party who can compete or in this
case is pure monopoly. The examples of this market in Indonesia are Perusahaan Listrik
Negara (PLN), Pertamina, PT Telekom, PT KAI still using monopoly market. For an
instance, PLN is state owned company that provide electricity in Indonesia, they monopoly
the distribution and electricity transmission, they set the price meanwhile the private
company only allowed in generating electric power. The crises electricity started when PLN
apply putting out of electricity in some towns. Thus, Monopoly by a country is good for the
importance of majority of the people but if it not followed by good intention and action, it
will harm the people.
The other is monopolistic market. Monopolistic market is a market where there are a
lot of producer with product differentiation (trade-mark, packing, etc) among the product
which is produced by each producers. Basically, monopolistic market is the same with perfect
competition market but in monopolistic there differentiation product with the result that the
products become heterogeneous (same product but can be considered as different by
consumer). The monopoly side of this market is considered from the capability among the
sellers in influencing the price. The examples in Indonesia are detergent soap such as Go-Jek

Tri Nugraha Ramadhani (13313193)

Development Economics

with the specification An ojek for every need and Grab-Bike Males kena macet, nge-bike
aja pake grab bike. Thus, the benefit from this market is product differentiation force the
consumers to be more selective in determine the product and they can be loyal with the
chosen product. The weakness of this product is the competitiveness is high form the price,
quality nor services so the firm that have no capital will be destroyed.
To sum up, imperfect market competition which is monopolized by the government is
actually has a good intention to fulfill the majority needs of the people but it turns out to be
bad because It can harm people when monopoly firm for example PLN don not increase their
quality, they often apply putting the light out in some towns. It disturbs the peoples activity
in some towns because most of the activities require electricity to work. With clean and good
government intervention the conflict between small and big company that leads to unfair
competition will be overcame. Therefore, the good intention will not work if there is no
improvement in the quality of the product in monopoly market, the product that mostly need
by the people only owned by the firm that have production factors.