Final answer:
Sellers in perfectly competitive markets are price takers and cannot sell below market price as they can sell any quantity at the prevailing market price. Their profits are determined by market price and quantity produced, so lowering the price would unnecessarily reduce profits.
Step-by-step explanation:
An individual seller in perfect competition will not sell at a price lower than the market price because the seller can sell any quantity she wants at the prevailing market price. In a perfectly competitive market, firms are price takers and must accept the price determined by the market demand and supply. These firms face a perfectly elastic demand curve, meaning they can sell any number of units at the market price without affecting the price.
When a perfectly competitive firm chooses the quantity to produce, the market price, along with the firm's total revenue and costs, determines its profits. Due to market dynamics in perfect competition, there is no incentive for a firm to sell below the equilibrium market price because it can already sell all the output it wants at this price. Selling at a lower price would only reduce profits, making it an unfavorable decision.