Duopoly
Market
It
is a market where only two sellers available and they are free from each other
to take any decision. They know each other very much and other activity. They
have no agreement but if any one of them start to make a change in price or production
then it affect the other & it start a chain reaction system which is a
wrong thing for market. If they assume that there is no effect in each other
and make sourly decision then it is a good thing for market.
 |
| Duopoly Market |
Assumption
–
ü Only two sellers in the market and
both know the market demand
ü Homogeneous or similar product to
sell
ü Lot of buyer in the market
ü Similar cost for both firm
ü Both not aware about other
production policy
ü Assume other production stable
ü Price will be decided by the market
ü Ban for new firm
There
are other models also and they have their own assumption like –
ü Location will be different
ü According to location, they have
different market
ü Marginal cost will be zero
ü Transportation cost add in the
selling price and it will be change according to the distance
ü Demand will be full elasticity
