Answer: Perfect competition occurs when there are many sellers in market , and there is easy entry and exiting of firms , all sellers have identical products and companies cannot determine prices .
Explanation: Price takers : It is a individual or company that must accept prevailing prices in a market , lacking the market share to influence market price on its own .
All economic participants are considered to be price takers in a market of perfect competition .
A perfectly competitive firm is known as price takers because the pressure of competing firms forces them to accept the prevailing equilibrium price in the market.
If a firm in a perfectly competitive market raises the price of its product by so much as a penny , it will lose all of its sales to competitors .
When a firm decreases the price of commodity , there will be a sharp increase in the demand which will be not met on time .
There is a negative profit in the long run for firms in perfect competition .