As the number of firms in an oligopoly increases, the
A)price approaches marginal cost, and the quantity approaches the socially efficient level.
B)price and quantity approach the monopoly levels.
C)price effect exceeds the output effect.
D)individual firms' profits increase.

Question

Quizplus · Accepted Answer

As the number of firms in an oligopoly increases, the market becomes more competitive, leading the price to approach marginal cost and the quantity to approach the socially efficient level, similar to a competitive market.

As the Number of Firms in an Oligopoly Increases, the