As additional firms enter a market, it moves from monopoly through oligopoly to perfect competition, in which case the profits of the former monopolist

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As additional firms enter the market, competition increases and the monopolist now faces competition from numerous firms, resulting in a decrease in market power and profits. This is because firms now have to lower their price in order to remain competitive, reducing their profit margins.

As Additional Firms Enter a Market, It Moves from Monopoly