Answer
The price charged by firms approaches the marginal cost and the quantity produced approaches the socially efficient level.
Work Step by Step
If the number of firms in an oligopoly is small, these firms may form cartels and act as a monopoly, charging higher prices and generating higher profits.
As the number of firms increases, forming cartels becomes more difficult. In this case, each firm decides on how much to produce and how much to charge.
As the number of firms increases, the oligopoly market starts looking more and more like a competitive market, because more firms are competing with each other and the effect each of them has on the market price decreases. The price charged by firms approaches the marginal cost and the quantity produced approaches the socially efficient level.
