Definition of duopoly
duopolies
1 : an oligopoly limited to two sellers
2 : preponderant influence or control by two political powers
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Recent Examples of duopoly from the Web
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AT&T and Verizon would be further entrenched as a duopoly, in which two companies control a market, rather than a monopoly, in which one company does.
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As those companies bought venues, nearing a duopoly, Pocono drew skepticism for remaining on its own.
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Both members of the global jetliner duopoly also have to contend with aircraft-development programs in Russia and China.
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The jet could also spur the incumbent duopoly of Airbus and Boeing Co. to embrace lightweight plastics and composites more, speeding up manufacturing in the process, Hummels said.
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As a result, advertisers will have to chase down these younger viewers on their mobile devices, where Facebook and Google have essentially staked out a duopoly on monetizing search and social.
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Domain and Realestate.com.au enjoy a duopoly in selling ads for residential real estate, property agents say.
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The Google-Facebook duopoly has unlocked billions in annual profits by establishing ever more reliable ways to track the efficacy of ads, using vast amounts of data to target consumers and then monitor their purchasing behavior.
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Within the span of one newsy week in April, the resort industry veered from a semi-monopoly controlled by Vail Resorts to a duopoly, with two giants vying for control.
These example sentences are selected automatically from various online news sources to reflect current usage of the word 'duopoly.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.
Origin and Etymology of duopoly
duo- + -poly (as in monopoly)
Financial Definition of DUOPOLY
duopoly
What It Is
How It Works
There are two kinds of duopolies. In the first, the Cournot duopoly, competition between the two companies is based on the quantity of products supplied. The duopoly members essentially agree to split the market. The price each company receives for the product is based on the quantity of items produced, and the two companies react to each other's production changes until an equilibrium is achieved.
In a Bertrand duopoly, the two companies compete on price. Because consumers will purchase the cheaper of two identical products, this leads to a zero-profit price as the two competitors attempt to attract more customers (and thus more profit) through price cuts. The threat of price undercutting means that Bertrand equilibrium prices and profits are generally lower (and quantities higher) than in Cournot duopolies.
Why It Matters
A duopoly forces each producer to carefully consider its rival's potential reactions to certain business decisions. When members of a duopoly compete on price, they tend to drive the product's price down to the cost of production, thereby lowering profits for both members of the duopoly.
These circumstances give duopolists a strong incentive to agree to charge a monopoly price and share the resulting profits. However, federal antitrust laws, most notably the Sherman Act, make collusive activity illegal in the United States. Additionally, each member of a duopoly still has an incentive to compete, even while colluding with the competition. An undetected price adjustment will attract customers who are buying from the competition and customers who are not buying the product at all. Price adjustments may be subtle, including better credit terms, faster delivery, or related free services.
Duopolies are most effective when the demand for the duopoly's product is not greatly affected by price. This is also why duopolies are more effective in the short term; over the long term, prices often become more elastic as consumers find substitutes for the product. Also, demand volatility may lead to disagreements within a collusive duopoly regarding outputs and prices.
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