True, In the short run, perfectly (or purely) competitive firms will maximize their profit by producing the quantity where marginal revenue = marginal cost the quantity where price equals marginal cost.
Because competing firms pressure them to accept the market's current equilibrium price, a perfectly competitive firm is referred to as a price taker. A company will lose all of its sales to rivals if it increases the price of its product by even a penny in a highly competitive market.
A hypothetical market system is referred to as perfect competition. Perfect competition offers a useful model for illustrating how supply and demand influence prices and behavior in a market economy, despite perfect competition rarely occurring in actual markets.
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