What happens to the market price as the number of sellers in an oligopoly grows?

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The total production decreases since each company reduces its output.Market prices deviate more from the marginal cost.Collaboration becomes easier because more firms can enforce discipline on any deviating member.The market price tends to approach the marginal cost.There is no change in the price or output levels.

Explanation

As more firms enter an oligopoly, competition intensifies, pushing the market price closer to the marginal cost. This happens because increased competition reduces the market power of individual firms, limiting their ability to keep prices above marginal cost.