Duopoly

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Title: Duopoly

Essay Details:

Subject: Business

Author: Delores B

Date: July 23, 2014

Level: University

Grade: B

Length: 2 / 358

Essay text:

The duopoly members essentially agree to split the market. The price each company receives for the product is based on the quantity of items produced, and the two companies react to each other's production changes until an equilibrium is achieved. In a Bertrand duopoly, the two companies compete on price. Because consumers will purchase the cheaper of two identical products, this leads to a zero-profit price as the two competitors attempt to attract more customers (and thus more profit) through price cuts. The threat of price undercutting means that Bertrand equilibrium prices and profits are generally lower (and quantities higher) than in Cournot duopolies...

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