Two probels arise with this analysi

Two probels arise with this analysis:
 The effect of product development and advertising on demand will be difficult for a firm to forecast.
 Product development and advertising are likely to have different effects at different prices. Profit maximisation, therefore, will involve the more complex choice of the optimum combination of price, type of product, and level and variety of advertising.
Monopolistic competition and the public interest
Comparison with perfect competition
It is often argued that monopolistic comprtition leads to a less efficient allocotaion of resources than perfect competition.
Figure 7.2 compares the long-run equilibrium positions for two firms. One firm is under perfect competition and thus faces a horizontal demand curve. It will produce an output of Q1 at a price of P1. The other is under monopolistic competition and thus face a downward-sloping demand curve. It will produce the lower output of Q2 at the higher price of P2. A crucial assumption here is that a firm would have tha same long-run average cost (LRAC) cuve in both cases. Given this assumption, monopolistic competition has the following disadvantages:
 Less will be sold and at a higher price.
 Firms will not be producing at the least-cost point.
By producing more, firms would move to a lower point on their LRAC curve. Thus firms under monopolistic competition are said to have axcess capacity. In figure 7.2 this excess capacity is shown as Q1 – Q2. In other words, monopolistic competition is typified by quite a large number of firms (e.g. petrol stations), all operating at less than optimum output, and thus being forced to charge a price above that which they could charge if they had a bigger turnover. How often have you been to apetrol station and had to queue for the pumps?
So how does this affect the consumer? Although the firm under monopolistic competition may charge a higher price than under perfect competition, the difference may be very small. Although the firm’s demandcurv is downward sloping, it is still likely to be highly elastic due to the large number of substitutes. Furthermore, the consumer may benefit from monopolistic competition by having a greater variety of products to choose from. Each firm may satisfy some particular requirement of particular consumers.
Comparison with monopoly
The arguments are very similar here to those when comparing perfect competition and monopoly.
On the one hand, freedom of entry for new firms and hence the lack of long-run supernormal profits under monopolistic competition are likely to help keep prices down for the consumer and encourage cost saving. On the other hand, monopolies are likely to achieve greater economies of scale and have more funds for investment, and research and development.

Hasil (Bahasa Indonesia) 1:

Dua probels muncul dengan analisis ini: Efek pengembangan produk dan iklan pada permintaan akan sulit bagi perusahaan untuk ramalan. pengembangan produk dan iklan yang cenderung memiliki efek yang berbeda pada harga yang berbeda. Keuntungan Technical Publications, oleh karena itu, akan melibatkan pilihan lebih kompleks kombinasi yang optimal dari harga, jenis produk, dan tingkat dan berbagai iklan.Kompetisi monopoli dan kepentingan umumPerbandingan dengan persaingan sempurnaHal ini sering berpendapat bahwa comprtition monopoli mengarah ke allocotaion kurang efisien sumber daya dari persaingan sempurna. Angka 7,2 membandingkan posisi jangka panjang keseimbangan untuk dua perusahaan. Satu perusahaan di bawah persaingan sempurna dan dengan demikian menghadapi kurva permintaan horisontal. Itu akan menghasilkan output dari Q1 dengan harga P1. Yang lainnya adalah di bawah kompetisi monopoli dan dengan demikian kurva permintaan wajah ke bawah miring. Itu akan menghasilkan output lebih rendah dari Q2 harga yang lebih tinggi dari P2. Asumsi yang penting di sini adalah bahwa perusahaan akan memiliki tha sama jangka panjang rata-rata biaya cuve (LRAC) dalam kedua kasus. Mengingat asumsi ini, kompetisi monopoli memiliki kerugian sebagai berikut:  Kurang akan dijual dan harga yang lebih tinggi.  Perusahaan tidak akan menghasilkan pada titik paling murah.By producing more, firms would move to a lower point on their LRAC curve. Thus firms under monopolistic competition are said to have axcess capacity. In figure 7.2 this excess capacity is shown as Q1 – Q2. In other words, monopolistic competition is typified by quite a large number of firms (e.g. petrol stations), all operating at less than optimum output, and thus being forced to charge a price above that which they could charge if they had a bigger turnover. How often have you been to apetrol station and had to queue for the pumps?So how does this affect the consumer? Although the firm under monopolistic competition may charge a higher price than under perfect competition, the difference may be very small. Although the firm’s demandcurv is downward sloping, it is still likely to be highly elastic due to the large number of substitutes. Furthermore, the consumer may benefit from monopolistic competition by having a greater variety of products to choose from. Each firm may satisfy some particular requirement of particular consumers.Comparison with monopoly The arguments are very similar here to those when comparing perfect competition and monopoly. On the one hand, freedom of entry for new firms and hence the lack of long-run supernormal profits under monopolistic competition are likely to help keep prices down for the consumer and encourage cost saving. On the other hand, monopolies are likely to achieve greater economies of scale and have more funds for investment, and research and development.