AND WHY DOES IT MATTER?
Buyers win when there are many sellers competing in the same line of business.
Under perfect competition, prices are low, supply is high, and buyers have many options.
Buyers and Sellers Have Power
Buyers lose when there are very few sellers and the largest have control over the market.
Under oligopoly, prices are high, supply is low, and buyers have fewer options.
Duopoly occurs when two firms control the market for a good or service.
of the market for soft drinks in 2012.
Coca-Cola & Pepsi Co controlled
Visa & MasterCard own
of European Union card transactions.
of the global large plane market.
Boeing & Airbus supply
Is Two Better Than One?
Two economic theories clash on how the duopoly will operate.
Firms will compete on quantity and methodically keep supply low.
Firms will compete on price and fight to have the cheapest product.