Definitions
- Referring to a market structure where only two firms dominate the industry. - Describing a situation where two companies control the majority of the market share. - Talking about a scenario where two businesses have a significant influence on pricing and competition.
- Describing a market structure where a small number of firms dominate the industry. - Referring to a situation where a few large companies control the majority of the market share. - Talking about a scenario where a small group of businesses have significant influence on pricing and competition.
List of Similarities
- 1Both duopoly and oligopoly refer to market structures where a small number of firms dominate the industry.
- 2Both involve a concentration of market power in the hands of a few companies.
- 3Both can lead to limited competition and higher prices for consumers.
- 4Both can result in barriers to entry for new firms trying to enter the market.
- 5Both can involve collusion or cooperation between the dominant firms.
What is the difference?
- 1Number of firms: Duopoly involves only two dominant firms, while oligopoly can have more than two but still a small number of dominant firms.
- 2Market share: In a duopoly, the two firms typically have equal market share, while in an oligopoly, one or a few firms may have a significantly larger market share than the others.
- 3Competition: Duopoly can involve more intense competition between the two firms, while oligopoly may have less intense competition due to the dominance of a few large firms.
- 4Pricing: Duopoly can result in more volatile pricing as the two firms compete, while oligopoly may result in more stable pricing due to the dominance of a few large firms.
- 5Impact on consumers: Duopoly may have a more direct impact on consumers due to the intense competition between the two firms, while oligopoly may have a more indirect impact on consumers due to the dominance of a few large firms.
Remember this!
Duopoly and oligopoly are both market structures where a small number of firms dominate the industry, leading to limited competition and potential barriers to entry for new firms. The main difference between the two is the number of dominant firms, with duopoly involving only two firms and oligopoly involving more than two but still a small number of firms. Additionally, duopoly may involve more intense competition between the two firms, while oligopoly may result in more stable pricing due to the dominance of a few large firms.
