Duopoly

What is a 'Duopoly'

A duopoly is a situation in which two companies own all or nearly all of the market for a given product or service. A duopoly is the most basic form of oligopoly, a market dominated by a small number of companies. A duopoly can have the same impact on the market as a monopoly if the two players collude on prices or output. Collusion results in consumers paying higher prices than they would in a truly competitive market and is illegal under U.S. antitrust law.

BREAKING DOWN 'Duopoly'

Boeing and Airbus have been called a duopoly for their command of the large passenger airplane market. Similarly, Amazon and Apple have been called a duopoly for their dominance in the e-book marketplace.


A closely related concept is a monopoly, a situation in which a single company dominates the market. The United States Postal Service, which is by law the sole provider of first-class mail services, is an example of a monopoly.

RELATED TERMS
  1. Duopsony

    An economic condition, similar to a duopoly, in which there are ...
  2. Monopoly

    A situation in which a single company or group owns all or nearly ...
  3. Cournot Competition

    An economic model that describes an industry structure in which ...
  4. Natural Monopoly

    A type of monopoly that exists as a result of the high fixed ...
  5. Legal Monopoly

    A company that is operating as a monopoly under a government ...
  6. Oligopoly

    A market structure in which a small number of firms has the large ...
Related Articles
  1. Markets

    How & Why Companies Become Monopolies

    Without competition, monopolies can raise prices and lower quality leaving consumers little choice. But monopolies can benefit consumers as well.
  2. Markets

    How a Monopoly Works

    In economics, a monopoly occurs when one company is the sole (or nearly sole) provider of a good or service within an industry. This potentially allows that company to become powerful enough ...
  3. Markets

    A History Of U.S. Monopolies

    These monoliths helped develop the economy and infrastructure at the expense of competition.
  4. Markets

    A History Of U.S. Monopolies

    Here are a few of the most notorious monopolies in U.S. history.
  5. Personal Finance

    Why Monopoly Is A Terrible Finance Teacher

    With its plethora of inaccuracies, Monopoly doesn't offer the best lessons in real-world finance.
  6. Markets

    New Monopoly Edition Ditches Paper Money (HAS)

    Hasbro's latest version of Monopoly speeds up the classic game and reflects our movement towards a cashless society. It will still probably end friendships over the "free parking" rule, though.
  7. Markets

    Antitrust Defined

    Check out the history and reasons behind antitrust laws, as well as the arguments over them.
  8. Personal Finance

    Why We Need Antitrust Laws (MSFT, AAPL)

    A look at antitrust laws in the United States and the many anticompetitive practices they safeguard against.
  9. Managing Wealth

    5 Lessons Monopoly Teaches Us About Finance And Investing

    The game of Monopoly can increase your chances of having a better and useful understanding of prudent financial and investment principles.
  10. Markets

    Early Monopolies: Conquest And Corruption

    This structure can be very effective, but it is also known for its abuse of power.
RELATED FAQS
  1. What are the major differences between a monopoly and an oligopoly?

    The major differences between a monopoly and an oligopoly include the number of firms in the market, type of barriers to ... Read Answer >>
  2. Why are oligopolies legal while monopolies are not?

    Learn about oligopolies and monopolies. Explore situations where anti-competitive practices have led to intervention by the ... Read Answer >>
  3. Are monopolies always bad?

    Learn why governments sanction some monopolies, such as monopolies over public utilities, and why these monopolies are good ... Read Answer >>
  4. What is a monopoly?

    Monopoly is a fun family game, but in real life, a monopoly can be dangerous to a country's economy. A monopoly occurs when ... Read Answer >>
  5. How does a monopoly contribute to market failure?

    Read a simple overview of the theory of market monopoly, where it originated and some contemporary challenges to the classical ... Read Answer >>
  6. What are common examples of monopolistic markets?

    Discover what causes real instances of market monopoly, how it persists and where monopoly privilege is most common in the ... Read Answer >>
Hot Definitions
  1. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  2. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  3. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  4. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  5. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
  6. Weighted Average Life - WAL

    The average number of years for which each dollar of unpaid principal on a loan or mortgage remains outstanding. Once calculated, ...
Trading Center