Duopoly Market Examples | Examples of Duopoly Market
Duopoly Market Definition
What is Duopoly Market?
A duopoly is a market form where two sellers dominate the industry and control prices, production, or distribution of goods and services. It is a market structure where there are only two sellers in the marketplace.
The term duopoly can also refer to an economic situation, such as when two companies control a large percentage of the market share and competition is minimal or non-existent.
A duopoly is a form of oligopoly where two firms dominate the market share. The term “duopoly” can refer to any situation in which two companies have significant control over a particular market, but it typically refers to markets with only two sellers.
Duopolies are often considered less competitive than monopolies because they lack the one firm that dominates all others. They may be more vulnerable to collusion between the two dominant firms.
These firms are not just competing against each other for market share, but they are also competing against foreign companies for consumers. The two firms usually approach this type of market in different ways.
One firm might try to compete based on the quality of the final product, while the other might try to compete based on price. The firms can have some degree of synergy, where they will compete with each other.
Examples of Duopoly Market
An example of this would be Google’s Android operating system and Apple iOS for mobile devices. This type of market structure can lead to monopolistic behavior because there are only two competitors in the marketplace.
Other examples of duopolies include Google and Yahoo!, Microsoft and Apple, Facebook and Twitter, Coke and Pepsi.
Microsoft vs. Apple Duopoly
Microsoft and Apple are two of the most iconic companies in the world. But did you know that they were once both struggling to make ends meet? Before their rise to become today’s successful tech giants, Microsoft and Apple were competitors.
Their first big battle was against IBM. Both Microsoft and Apple felt threatened by the giant that was IBM. This was also seen as a time when personal computing technologies were still developing since it was only in 1977 that IBM released their first personal computer (the original PC).
IBM was the leading provider of software in the marketplace at that time. So, Microsoft and Apple decided to create their own operating system. It was called MS-DOS (Microsoft Disk Operating System). This product was similar to IBM’s but with a few differences: it used a mouse, had graphical user interfaces, and featured the ability to save more diskettes information.
The two companies soon had an agreement with IBM not to sell their DOS program (and, by consequence, their operating system) outside of the company. However, when IBM took on a new CEO, they had an internal dispute that led to them betraying their duopoly partners and releasing their own software.
Microsoft vs. Apple became a duopoly war for which the company was going to gain dominance in the PC industry. Macs dominated the top tier of computer users, mostly graphic designers and businesses working on huge projects. One year later, Windows 3.0 was released (famously called “the camel”).
It had a graphical user interface very similar to previous Mac operating systems. In the late 1980s and early 1990s, Microsoft was faced with lawsuits for its alleged MS-DOS and Windows software monopoly position.
The courts ruled that while there were some violations, it didn’t prove a monopoly. Apple continued on its road to success with its release of the Macintosh computer. They started selling more computers than IBM in 1987, but they were still nowhere near as successful as Microsoft at that time. The two companies battled against each other until the late 1990s when Microsoft released its Windows 95 OS.
Windows 95 was a huge success and boosted Microsoft’s share of the PC market significantly. This resulted in Apple filing a duopoly suit against Microsoft, which ended in an agreement between the two companies that they wouldn’t release similar products around the same time. Apple agreed to drop their lawsuit in exchange for Microsoft dropping Office for Mac and making it cross-compatible with Macintosh computers (which had never been done before).
Apple and Microsoft were no longer competitors; they were allies. Both companies benefitted greatly from each others’ products and the end of their competition, and today it’s not uncommon for the two companies to release similar products at the same time.
Today, Apple is one of the most valuable companies globally, with over $2.080 trillion in value. They are a first-class company that has done so much for our economy through their inventions and technological breakthroughs. They revolutionized the way people listened to music and allowed us to watch high-quality videos on the go.
Microsoft is still going strong, despite threats from Android and iOS. Their outreach is worldwide, active in well over 100 countries. They are the leaders in computer software, and millions of people worldwide use their Windows OS. Microsoft has also made a name for itself as innovators with products like Kinect, Xbox 360, and Windows Phone. It’s safe to say that Microsoft vs. Apple won’t be ending anytime soon.
Coke vs. Pepsi Duopoly
The story of Coke and Pepsi is a simple one. Although Coca-Cola was the original soda company that created an incredibly successful beverage, it wasn’t much longer before that another drink company came along to challenge them: Pepsi. Also founded in New Bern, North Carolina, by Caleb Dineen and Charles Woodruff in 1913, Pepsi was eventually acquired by In 1964 by Frito-Lay for $82 million.
Frito-Lay was a marketing and foodstuff company that had started with the creation of Cheetos in 1937. The two companies came together to produce Cheetos Puffs, which would become the first snack food to go nationwide. The addition of chips to the Pepsi family would come in 1970 when Frito-Lay introduced Doritos Crackers. This was where it all began for the rivalry between these two companies.
Today, both companies are still extremely successful, but with drastically different goals. Coca-Cola is one of the top companies in the world and has been for a very long time. They have shown no signs of slowing down, and their market share is among the highest in any industry. They serve over 1 billion drinks every day, which is more than 16 million pounds of sugar that are added to their 150 products annually.
On the other hand, Pepsi has made a name for itself as an alternative to Coca-Cola. They have introduced products like Pepsi Max, Pepsi Advantage, and many others. They’ve also been in the news a lot more for things like being the first company to create a “non-alcoholic” version of Mountain Dew, Pepsi Twist, and Diet Pepsi Freestyle. Pepsi’s success has pushed Coca-Cola to try new things like revamping its portfolio with products such as Tropicana, Aquafina, and Smartwater.
Both Coca-Cola and Pepsi have enjoyed many years of success in the beverage industry, and we can only expect that to continue. They’ve managed to keep up with each other over the years, and it’s rare to hear anything about one company without hearing about the other. Both companies are leaders in their field, but we’ll see which one will come out on top as time goes on!
Duopoly Advantages and Disadvantages
A duopoly market is a type of imperfect competition where two sellers have significant control over a good or service price and output.
The main advantage of this type of market is that it can lead to more efficient production, lower prices, and higher quality goods.
A disadvantage to this type of market is that collusion between the two companies may occur, leading to an unfair distribution of profits.
Duopoly Market Features & Characteristics
A duopoly is a market where two firms have significant power and control over the market. These two firms can be in an international market or a domestic market. The difference between a duopoly and other markets is the power and control over the market.
The word duopoly means a market where there are only two sellers. In a duopoly market, the competition between the two firms is very intense, and it is tough to achieve monopoly status in such markets.
In most cases, the word “duopoly” refers to a market or industry with only two competitive suppliers’. Therefore, the definition of a duopoly is sometimes expanded to any industry that has only two significant suppliers who are each other’s closest competitors.
However, the word duopoly is most commonly used to refer to clearly competitive industries.
A clear-cut example of a duopoly is the mobile phone market. It is not true that the market for mobile phones was previously two-sided. However, once competition developed from the much more expensive feature phones, demand increased, becoming a duopoly.
Another example of a duopoly would be two or three suppliers in a pharmaceutical market, e.g., two or three firms producing aspirin.
A duopoly market can exist even in industries where only one firm is involved—the most common example of an industry where only one firm is involved in the airline industry. Airlines are often free to set their fares, and there may be intense competition among airlines, leading to very high prices and market shares (see below).
However, in some cases, the government may regulate the airfare prices and/or airway traffic, making this industry clearly competitive. In such cases, a duopoly no longer exists.
Cournot Model of Duopoly
The Cournot model of the duopoly is an economic theory that Antoine Augustin Cournot developed in 1838. The Cournot model explains how two competing firms can simultaneously choose their production levels and the market price when they have perfect information about each other’s actions.
In the Cournot model of duopoly, two firms are assumed to be producing a homogeneous product. The total market demand curve is downward sloping, and each firm’s marginal cost curve is upward sloping.
In this situation, there will be an equilibrium output level where both firms produce at the same level and charge the same price for their products.
Duopoly Graph
Characteristics of Oligopoly and Duopoly
Oligopoly Vs. Duopoly
An oligopoly is a market form where only a few sellers dominate the market in terms of production, distribution, or pricing power.
A duopoly, on the other hand, consists of two firms that control an entire industry. These companies tend to work together to keep their combined power; they may also engage in price-fixing and bid-rigging to maintain high profits.
Oligopoly markets are characterized by at least two, but often many more than two firms in a market. A duopoly is when there are only two firms.
Oligopolies have characteristics of both monopoly and perfect competition, as they can be price makers or price takers depending on their influence in the market.
Duopolies are also considered price takers because they sell identical products in an industry where no other company has another product that consumers would buy.