Final answer:
An oligopoly is the market form where a domestic and a foreign firm dominate the market, such as Boeing and Airbus in the commercial aircraft industry.
These firms have strategic influence over the market due to their size and the close substitutability of their products, which results in high barriers to entry and strategic decision-making.
Step-by-step explanation:
The name given to a market in which a home monopoly firm and a foreign monopoly firm are producing very similar products is an oligopoly.
This term describes a market dominated by a small number of firms that hold the majority of the market share, producing goods or services that are close substitutes for each other.
In the example provided, firms like Boeing and Airbus in the commercial aircraft industry illustrate an oligopolistic market where each produces slightly less than 50% of the wide-body airplanes, thus creating high barriers to entry and making strategic output and pricing decisions influenced by each other's actions.
Oligopolies face the decision to collaborate, akin to a single monopoly, or to compete individually for more profit by adjusting output and pricing. Analyses of oligopoly markets often involve game theory to understand the strategic behaviors under different competitive scenarios.
The significance of oligopolistic markets extends to the impact they have on consumer choices, product differentiation, advertising strategies, and overall market efficiency.