As the number of firms in an oligopoly market grows larger, the price will approach:
A)marginal revenue
B)marginal cost
C)zero
D)the monopoly price

Question

Quizplus · Accepted Answer

In an oligopoly market, as the number of firms increases, competition among them also increases. This leads to a situation where firms will start to price their goods closer to their marginal cost to remain competitive, thus the price will approach marginal cost.

As the Number of Firms in an Oligopoly Market Grows