Perfect Competition the most basic of market structures. Firms produce a homogeneous product. Buyers and Sellers are fully informed about price and availability of resources and products. Firms and resources are freely mobile.
Price is determined by market supply and market demand.
Once the market establishes the price, each individual firm is free to supply whatever amount maximizes the firm s profit. Once the market price is established, the firm can sell all it wants at the market price. We assume firms try to maximize profit. Firms that ignore this strategy can t be around long. The perfectly competitive firm has no control over price.