Question

Define and name a Duopoly, are they a Monopoly and why they are or are not? Explain what a Cartel is, and why are they not illegal broadly speaking? Please define in economic terms.

Answer 1

A duopoly is a situation in which two joint ventures control all or nearly all of the market for a given product or service. A duopoly is the most important type of oligopoly, a market dominated by a small number of firms. If the two companies collude on costs or production, a duopoly may have the same market effect as a monopoly. Collusion allows consumers to pay higher rates than they would on a fully open market, and under U.S. antitrust law it is illegal.

Example of Duopoly are: Visa Vs Master Card- Payment methods

Yes they were ruled by definition to be monopolies, and in fact, the Justice Department of President Bill Clinton brought Visa and Mastercard into a nationwide lawsuit in 1998 claiming that the two companies were colluding with each other in order to keep away other competition.

To order to gain a monopoly and limit competition in any single market or commodity, a combination of suppliers of any product joined together to regulate its production, distribution, and price. Cartels mainly operate in Europe, and are illegal under antitrust laws in the United States. In addition, an alliance by agreement between companies or parts between companies with shared interests aimed at avoiding excessive or unfair competition and allocating markets and encouraging the sharing of information arising from scientific and technological research, patent sharing and product standardization.

In war, an agreement between two opposing powers for the transfer of prisoners or deserters, or allowing such non-hostile contact with each other that would otherwise be prohibited by the state of war, such as agreements with enemies for intercommunication by post, telegraph, telephone, or rail.