Two kids in economics class were discussing. First kid said “A market with two firms is known as a perfect competition”. The other kid objected and said “No, such a market is known as a duopoly.” Third kid listening to them interrupted and said” no, you bother are mistaken. It is called oligopoly.” Who would you agree with?
Answer & explanation
Correct answer: option 2
The second kid is right, as a market with two firms is called a duopoly. Duo means two.