Duopoly

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Duoploy
- What does duopoly mean?
According to the publication investing answers, the actual meaning for duopoly as a whole states that, ' duopoly is a form of 'oligopoly' occurring when two companies (or countries) control all or most of the market for a product or service.'

There are two different types of duopoly.
1) 'Cournot duopoly', defines the competitions between the two companies is based on the quantity and supply. Duopoly involves two companies agreeing to slip the market.'

2) 'Bertrand duopoly', is associated when two companies compete on prices. Because consumers will prefer a cheaper alternative between similar products, 'this leads to zero profit price as the two conpetitors attempts to attract more customers and produce more profit through cut price. The threat of price cutting means that 'Bertrand equilibrium prices and profits are generally lower (and quantities higher) than in 'courtnot duopolies'. (Investing answers 2014, duopoly, viewed 19th of March 2014, <.. >)

- What I'd the purpose of duopoly?
A duopoly is a market power that forces each manufactuturer to strategically consider its competitors potential reaction to particular business decisions when the manufacturer of the duopoly completes on prices, they trend to drive the companies product prices down to the cost of production.

These situation give duopoly companies an effective motivation to agree to change a 'monopoly' price and share the resulting profit. It is stated that duopoly are most effective when consumer demanded for the product is not greatly affected by price. Furthermore, duoplies are more effective on the short term, as over a long term, prices often become more elastic as consumers finds another alternative for the product. Ho...

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...utting down prices to attract comsumers will increase demand of consumers as consumers are paying less for groceries. However, Woolworth and Coles are a using their market power of keeping a constant competitive environment amongst other supermarkets such as Aldi and Costco.

Advantages of duopoly
-The advantages of duopoly in supermarkets is it portrays close competitions for other supermarkets.
-The competition of prices is direct to other producers such as Woolworth and Coles offering better prices to its comsumers.

Disadvantage of duopoly
- Two huge corporations in one market will make it very difficult for smaller firms to gain recognition or a market share. This means many new firms out before they are able to generate any new
- It's competitive environment will make it harder for other companies to develop more products and keep up with its competitors.

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