Demand Curves with Duopoly When there are two firms in the market and they both charge the same price, each firm faces the demand curve D/2. At the price P1, the industry produces Q1 at point A and each firm produces Q2 = Q1/2 at point B. If both firms produce identical products and one firm lowers its price to P2, all consumers will buy from that firm only; the firm that lowers its price will face the demand curve, D, and sell Q3 at point C. Alternatively, if the products are differentiated, the firm that lowers its price will take some, but not all, sales from the other firm; it will face the demand curve, d, and at P2 it will sell Q4 at point C′.