Duopoly

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DEFINITION of 'Duopoly'

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.

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