The amount supplied will increase as the price increases. The quantity demanded will decrease as the price increases. It is the interaction between supply and demand that determines the market price in the long-run. If surpluses develop, a signal is sent to sellers to lower the price. If shortages develop, a signal is sent to sellers to increase the price.
Competition exists in different degrees, ranging from perfect to nonexistent.
Sellers produce products that appear to be identical. There are no true examples of perfect competition, but agricultural products are often used as an example. Product differentiation, making buyers think similar products are different, is a key to success. Under monopolistic competition, individual sellers set prices. The fast food industry is an example.