Question

which of the following statements is true of duopolies? a. duopolies have great influence over the pricing and the availability of the products and services they sell. b. consumers have many purchasing options in duopolies. c. in duopolies, there are many firms that sell a product or service. d. duopolies result in decreased demand for goods and services. e. duopolies encourage competition.

Explanation:

A duopoly is a market structure with two firms. Let's analyze each option:

• Option A: Since there are only two firms, they can significantly influence pricing and product availability (oligopolistic behavior, and duopoly is a type of oligopoly).
• Option B: With only two firms, consumers have limited purchasing options, not many.
• Option C: A duopoly has exactly two firms, not many.
• Option D: Duopolies don't inherently decrease demand; demand is based on consumer preferences, etc.
• Option E: With only two firms, there's less competition compared to perfect competition; they may collude or engage in non - price competition, so they don't encourage competition.

Answer:

A. Duopolies have great influence over the pricing and the availability of the products and services they sell.