Final answer:
It is true that company sales potential is the maximum market share a firm can expect to capture for a specific product. In a perfectly competitive market, a company's main decision is the quantity of product to produce.
Step-by-step explanation:
The question pertains to company sales potential, which is often misunderstood as being the same as market potential. However, these are distinct concepts. Company sales potential is specifically the highest share of market potential that a single firm can realistically expect to achieve for a particular product within an industry. It is True that company sales potential is the maximum percentage of market potential that an individual firm can expect to obtain for a specific product.
In a perfectly competitive market, a firm's primary decision revolves around determining the quantity to produce. This production decision is critical because in such a market, firms are price takers due to the presence of many competitors offering homogeneous products. As such, the individual firm's control is limited to the quantity of goods it supplies to the market.
The basic definition of profit for these firms is essentially the difference between total revenues and total costs. A perfectly competitive firm cannot influence market price but can find the optimal quantity to produce where marginal cost equals marginal revenue to maximize profit. Hence, while calculating company sales potential, it is imperative to understand that this potential is cuffed to the competitive dynamics and conditions prevailing in the market it operates within.