In a particular town, Comvision and Veriview are the only two providers of cable TV service. Comvision and Veriview constitute a
A)duopoly, whether they collude or not.
B)cartel, whether they collude or not.
C)Nash industry, whether they collude or not.
D)monopolistically competitive market if they charge the same price.

Question

Quizplus · Accepted Answer

A duopoly is a market structure in which two firms dominate the market. Regardless of whether they collude or not (which would make them a cartel), if Comvision and Veriview are the only players in the market, they constitute a duopoly. A Nash industry refers to a type of oligopoly in which firms make decisions based on what they believe their competitors will do, and monopolistic competition refers to a market structure with many firms selling differentiated products. Therefore, the best choice is A, duopoly.

In a Particular Town, Comvision and Veriview Are the Only