Duopolies are often unstable and can lead to market failure. When two companies have a duopoly, they can become complacent and not work as hard to improve their product or service. This can lead to a decrease in quality for the consumers, which could cause them to switch to a competitor.Additionally, when there is only one other company in the market, the duopoly companies may collude in order to keep prices high and profits high. However, if one of the companies gets too greedy or if something happens that disrupts this agreement (e.g., new technology comes along), it could result in a price war between the two companies that would be harmful for both of them.
