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What is a Duopoly?
A Duopoly is a market condition where the total market of a product or service or most of the market is controlled by only two corporations. It is the very basic form of oligopoly.
How Does a Duopoly Arise?
A duopoly may arise through competition, anti-competitive practices, or merger/acquisition. In this united states, anti-competitive activities and mergers/acquisitions that reduce competition to the level of duopoly is illegal.
What is the Effect of a Duopoly?
At times these two corporations collude on prices or output when exerting market control. A duopoly has the same impact as a monopoly. The customers need to pay a higher price in the absence of a truly competitive market.
Duopoly achieved through anti-competitive activity is illegal in the U.S.
Duopoly is not an ideal market situation as it poses threat to the concept of free market economy.
Back to:ECONOMIC ANALYSIS & MONETARY POLICY
Related Topics
- Market Structure
- Perfect Competition
- Bidding War
- Complements & Substitutes
- Substitution Effect
- Imperfect Competition
- Market Power
- Price Takers
- Price Makers
- Perfect Competition and Decision Making
- X-Efficiency
- Captive Market
- Contestable Market Theory
- Highest Profit Point in a Perfectly Competitive Market
- Marginal Revenue
- Using Marginal Revenue and Marginal Costs to Maximize Profit
- Marginal Revenue Curve
- Profit Margin and Average Total Cost
- Break Even Point - Cost Curve
- Shutdown Point - Cost Curve
- Short-Run Decisions Based Upon Costs in a Perfectly Competitive Market
- Marginal Costs and the Supply Curve for a Perfectively Competitive Firm
- Long-Run Average Supply (LRAS)
- Decisions to Enter or Exit a Market in the Long Run
- Long-Run Equilibrium in a Perfectly Competitive Market
- Constant, Increasing, and Decreasing Cost Industries
- Productive and Allocative Efficiency in Perfectly Competitive Markets
- Market Efficiency
- Market Inefficiency
- Pareto Efficiency
- Market Failure
- Search Theory
- Monopoly
- Natural Monopoly
- Legal Monopoly
- Bilateral Monopoly
- Promoting Innovation through Intellectual Property
- Predatory Pricing
- How Monopolists Set Price with the Demand Curve
- Total Cost and Total Revenue for a Monopolist
- Marginal Revenue and Marginal Cost for a Monopolist
- Inefficiency of Monopoly
- Perfectly Competitive Market
- Monopolistic Competition
- Duopoly
- Oligopoly
- Differentiated Products
- Perceived Demand for a Monopolistic Competitor
- Monopolistic Competitors Choose Price and Quantity
- Monopolistic Competitors and Entry
- Monopolistic Competition and Efficiency
- Cartel (Economics)
- Game Theory
- Traveler's Dilemma
- Prisoner's Dilemma
- Iterated Prisoner's Dilemma
- Nash Equilibrium
- Diner's Dilemma
- Trembling Hand Perfect Equilibrium
- Gambler's Fallacy
- Arrows Impossibility Theorem
- Backward Induction
- Tournament Theory
- Oligopoly and the Prisoner’s Dilemma
- Forcing Cooperation in a Prisoner’s Dilemma
- Cooperation and the Kinked Demand Curve
- Corporate Merger or Acquisition
- Antitrust Laws
- Herfindahl-Hirschman Index
- Concentration Ratio
- Other Approaches to Measuring Monopoly Power in an Industry
- Restrictive Practices under Antitrust Law
- Natural Monopoly
- Cost-Plus Regulation
- Price Cap Regulation
- Regulatory Capture
