Final answer:
Firms in a perfectly competitive market must charge the market price for their goods or services because they are price takers and have no control over the price. Buyers can easily switch between sellers based on price, and firms must charge the market price to maximize profits.
Step-by-step explanation:
In a perfectly competitive market, firms must charge the market price for the goods or services they produce because they are price takers. This means that they have no control over the price and must accept whatever price is set by the market.
Since there are many sellers and the products are identical, buyers can easily switch between sellers based on price. If a firm charges a higher price than the market price, buyers will simply choose to buy from another seller, resulting in a loss of customers.
On the other hand, if a firm charges a lower price than the market price, it would be leaving potential profit on the table, as buyers are willing to pay the market price. Therefore, in order to maximize profits, firms in a perfectly competitive market charge the market price.