Duopoly

Imagine you and your friend are the only two kids in class who have a toy that everyone wants. You and your friend decide to work together and each agree to only sell the toy for a certain price. This is called a duopoly.

A duopoly is when there are only two companies or individuals providing a certain product or service in an industry. This means that they have a lot of power because they can control the market and set the price.

Just like you and your friend with the toy, these companies can agree to work together and keep the price of their product or service high. They can also compete with each other to try and offer a better version of the product or service.

However, this can also lead to problems because if both companies only care about making money, they might not care about the quality of the product or service they are providing. This can make it harder for new companies to enter the market and give people more choices.

So just like it's important for you and your friend to share and play fairly with your toy, it's important for companies in a duopoly to make sure they are not taking advantage of their power and not neglecting the quality of their product or service.