What term defines a market structure with only two businesses producing a specific product or service?

The term that defines a market structure with only two businesses producing a specific product or service is known as a duopoly. In this setting, the two firms hold significant control over the market; their decisions, such as pricing and output levels, directly impact each other. This interdependence can lead to various competitive strategies, as both firms must consider the actions of their competitor. The nature of a duopoly can influence market prices, product variety, and overall consumer choice.

In contrast, a monopoly refers to a market structure where only one firm controls the entire market for a particular product or service, effectively eliminating competition. An oligopoly consists of a few firms dominating the market, where the actions of each firm affect the others but not solely limited to two. Lastly, competition generally implies a market structure with multiple firms vying for market share, leading to a wide range of choices for consumers.