Why Are Duopolies So Competitive?

a price Inflatable Water Game fix scheme alwai make more sens in a commod business. After all,Finally. ani product differenti limit the degre to which gener demand is applic to specif competitor products. For example, Coke and Pepsi ar highli differenti products, at least when purchas in their specif packag physic differ or similar ar immateri here; it is onli the buyer s belief that matter . I drink Pepsi, and I can assur you howev irrat it sound that no drop in the price of Coke would be suffici to get me to stop bui Pepsi. There is almost no other tangibl good about which I could sai the same. So, clearli Coke and Pepsi ar differenti products, and there s veri littl chanc of an effect price fix scheme between them.


A duopoli is a situat in which two firm control nearli all of the market for a product or service.

you ll realiz why a duopoli can be so competitive. A larg number of ineffici competitor will have almost no affect on price in the long run unless someon either a govern or a group of idiot investor is will to continu financ unprofit oper in an unprofit industri think airlin . Duopoli can be surprisingli competitive. If you rememb that the price of a product or servic is determin sole by the highest lose bid price and the lowest lose ask price.

there is alwai the fear of a price fix scheme in a duopoly. Generally,Of course. however, that fear is unfounded. Human natur suggest a price fix scheme is far more like to occur in an oligopoli than a duopoly. Human weight the fear of loss far more heavili than the greed of gain when make calcul about the future. In a duopoly, mistrust increas the fear of loss inher to ani price fix scheme namely, the other gui will stab you in the back . In an oligopoly, the diffus of power and the lack of excess capac at ani on firm make price fix veri attractive. Price fix in an oligopoli is a much safer bet than price fix in a duopoly.

of course,There are. other reason why a duopoli is veri unlik to result in a price fix scheme. In addit to a healthi doe of fear, there is an often unhealthi doe of hate in duopolies. There is alwai just on scapegoat in a duopoly. Hatr is a person emotion; if spread over too mani object it tend to wane away. Finally, there s the simpl fact that both competitor in a duopoli ar like realli big, realli agile, realli cutthroat players. The process lead up to a duopoli tend to be a sort of wolf run, in which two pup ar separ from the runts.

price fix is possibl in a duopoly. Some duopoli ar not the result of competit but of nation and privatization,Have said all that. although thi is rel rare sinc a nation monopoli won t often result in a last duopoli it will either remain a monopoli onc privat or get crush by new, privat competitor .