Question

In a large city, two taxi companies own all the licenses that the city will grant to operate taxis. consumers don't care which cab company they take—if they decide it's worth taking a cab, they flag down the nearest one.

Answer 1

this situation can be classified as an duopoly

Step-by-step explanation:

An duopoly is similar to a monopoly but instead of only supplier there are two suppliers that share total market power and control. Both companies also offer basically the same product or service. Competition exists between the companies but it is not significant, both companies decide to coexist. Customers are forced to choose between one company or the other.

In this case, there are only two taxi companies and the customers really don't care what company they use since they both offer similar services. None of the companies even bothers to offer a better service to try to gain a larger market share.