Question

What is the difference between an oligopoly and a duopoly? Please provide real-life examples in your response. Do you believe R.C. Cola is less popular as it is outdated and consumers who drink R.C. Cola are likely to be Baby Boomers and Generations Xers? Please explain. Why do you suppose R.C. Cola has not gone out of business?

Answer 1

Duopoly: A duopoly is a market structure in which almost entire market is owned by two enterprises/companies/ firms. Duopoly also has similar effects as that of in case of monopoly.

Example:Boeing and Airbus have been called a duopoly for their command of the large passenger airplane market. Similarly, Amazon and Apple have been called a duopoly for their dominance in the e-book marketplace

Oligopoly: Of all the market structures, Oligopy is the most commanly observed scenario practically. An oligopoly exists when few market players control the entire market. The businesses form cartels (associations or groups ) to influence the demand & supply in their interest.

An example of oligopoly is the leading auto manufacturers in the United States being Chrysler,GMC,and Ford.

R.C cola:It's produced by a large bottler in smaller volumes for a niche market. And due to the economies of scale, it can be offered in low volumes at equal cost to any other drink.Moreover,they haven't been spending too much on advertising which inturn has helped them keep their cost low,enabling the availability of the product at a lower cost at the market place(offering the same qty).