If an oligopoly market is contestable and new firms enter,the

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When new firms enter a contestable oligopoly market, the threat of competition increases for the former oligopolists. This can lead to a reduction in their market power as they face pressure to lower their prices and improve their products in order to remain competitive. As a result, choice A is the best option. Additionally, it is not likely that the number of firms in the industry would decrease, as new firms are entering. It is also not likely that former oligopolists would raise their prices, as they would risk losing their market share to the new entrants.

If an Oligopoly Market Is Contestable and New Firms Enter,the