Question

Differentiate between oligopoly and duopoly.

Answer 1

The following differences are found between oligopoly and duopoly –

1. Number of sellers is more than two in oligopoly while they are only two in duopoly.
2. In oligopoly, price is determined on basis of marginal revenue and marginal cost, while in duopoly, price is determined by mutual agreement and nature of market.
3. Product differentiation exists in oligopoly, while in duopoly, both firms make the the same product.
4. There is lack of collusion among firms in oligopoly, whereas it exists in duopoly.