Question

PASSAGE

In India, markets for automobiles, cement, steel, aluminium, etc, are the examples of oligopolistic market. In all these markets, there are few firms for each particular product. Duopoly is a special case of oligopoly, in which there are exactly two sellers. Under duopoly, it is assumed that the product sold by the two firms is homogeneous and there is no substitute for it. Examples where two companies control a large proportion of a market are: (i) Pepsi and Coca-Cola in the soft drink market; (ii) Airbus and Boeing in the commercial large jet aircraft market.

Operating systems for smart phones and computers provide excellent examples of oligopolies in big tech. Apple iOS and Google Android dominate smart phone operating systems. Computer operating systems are overshadowed by Apple and Microsoft Windows.

1. Give examples of oligopolistic market in India (1 mark)
2. Explain the concept of duopoly with a suitable example from the passage (1 mark)
3. Express your personal opinion based on the above information (2 marks)

Answer 1

1. Automobiles, cement, steel, aluminium etc. are examples of oligopolistic markets in India.
2. Duopoly is a type of oligopoly in which there are exactly two sellers and the product sold by the two firms is homogeneous with no substitute for it. E.g.: Pepsi & Coca-Cola in the soft drink market.
3. Oligopoly is a type of market where there are a few sellers producing either a homogenous or differentiated product. In India, we have various examples of this type of competition. Airtel, Vi, Jio in the telecom market, HPCL, BPCL and IOCL in the oil market, Hyundai, Toyota, Maruti, Kia, Tata, Mahindra, Ford in the automobile market.