Advantages and Disadvantages of a Duopolistic market structure

1822 Words Oct 24th, 2013 8 Pages
Advantages and Diadvantages of a duoppolistic Market structure jaiveer Khurana
Advantages and Disadvantages of a Duopolistic Market structure

A duopolistic market structure is a form of oligopoly in which two main companies dominate most of the market share of a particular product or a service. The impact on the market is quite similar to that of a monopoly.

In a duopolistic market structure the companies that have a duopoly reap the full benefits of controlling the price and output in the market. But this makes it very difficult other companies to enter the market or survive in the long run

In Australia the best example of a duopoly is perhaps Woolworths and Coles. Lets take the case of the Woolworths and Coles
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Reports have indicated that in some petrol pumps owned by both Woolworth and Coles the petrol subsidies went up to like 166.9c a litre.. The Chairman of ACCC Mr Rod Sims has issued a court notice against the petrol shopper dockets offered by Woolworths and Coles. The report by ACCC also indicates that this scheme will hurt may fuel retailers in the long run and will ruin the chance of a fair competition in the country. Even though the consumers are happy with this scheme but this will harm many retailers and there can also by a point of a duopoly in selling of petrol in the country by only two companies in the future.
Supplier’s complaints- A large number of suppliers to Woolworths and Coles have expressed that they have a difficulty in working with them. The milk war between Woolworths and Coles, which resulted in the reducing the price of most of the other day to day, use utilities and food like bread, toilet paper and tea.. The $1 for a litre of milk might be in amazing scheme in attracting a large volume of customers but for the dairy farmers it might not be an amazing scheme as they might be concerned about their profit margins. Suppliers have also raised concerns about the price discrimination they have to face because of the home branded goods. Many suppliers have also stated they find it much easier and simple to work with International retailers like the German supermarket Aldi. . Many
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