A market condition categorized by the existence of only two competing companies in one market. These two companies can work in tandem, if they so choose, to engage in such wholesome activities as price-gouging, whereby they make sure that the consumer has no clear advantage in going to any one business. This works for the mutual gain of both firms, although it ultimately works against the needs of the consumers. For this reason, duopolies are often watched by consumer watchdog groups to make sure that they are on the level.
See also oligopoly, for similar cases where more than two firms are involved.