the individual farmer. A perfectly competitive firm must be a very small player in the overall market, so that it

can increase or decrease output without noticeably affecting the overall quantity supplied and price in the

market.

A perfectly competitive market is a hypothetical extreme; however, producers in a number of industries do

face many competitor firms selling highly similar goods, in which case they must often act as price takers.

Economists often use agricultural markets as an example. The same crops that different farmers grow are

largely interchangeable. According to the United States Department of Agriculture monthly reports, in

December 2021, U.S. corn farmers received an average of $5.47 per bushel. A corn farmer who attempted to

sell at $6.00 per bushel would not have found any buyers. A perfectly competitive firm will not sell below the

equilibrium price either. Why should they when they can sell all they want at the higher price? Other examples
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