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Oligopoly, monopoly and duapoly structure in any one or two industries in Australia and it affects in the market

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Oligopoly, monopoly and duapoly structure in any one or two industries in Australia and it affects in the market
Answered Same Day Apr 03, 2020 HI5003


Deepika answered on Apr 08 2020
142 Votes
Supermarket Duopoly
Duopoly is a market structure characterised by the presence of two leading sellers who cater to all or most of the market supply. The products they sell could be homogenous or distinguished. They often compete but they are well aware about their mutual interdependence in their decisions. One such real example in Australia is Supermarkets catered majorly by Coles and Woolworths, popularly called as Supermarket duopoly. After the long period of dominance by this duopoly in the Australian markets, a European upstart Aldi has entered the market and captured almost 10 % share of the market. Even then they enjoyed a comfortable and profitable duopoly until recently when Woolworth suffered losses after it undertook a failed venture into home improvement retail business. It is generally seen that in case of duopoly, one of the firm is more dominant. This has also been the case in this supermarket duopoly, Coles had been in the dominant position for several years.
A duopoly has the following characteristics:
· Two firms holding market dominance: On account of the large market share that each firm holds, each firm has the capability to influence market price and strategy of the rival.
· Interdependence of Decision Making: As there are only two firms in the market, the market strategy and decisions of one
ing about retaliatory response from the other. In a duopoly, the firm could collude or compete. The examples of duopoly include, Cournot model, Stackleberg model, Betrand model etc.
· Ba
iers to Entry. There are many reasons due to which the entry of new firms in the industry is restricted. These include significant initial investment to match up and compete with the existing firms, economies of large scale production which are enjoyed by the existing firms, consumer’s preferences and loyalty towards the products and services of the existing firms and opposition by the existing firms in the form of price cuts.
· Indeterminate demand curve: The interdependence of duopoly firms’ in their price and output decisions, leads to indeterminate demand...

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