Under perfect competition price of the goods remain same because it is determined by the industry .

Price Determination in Perfect Competition
In a perfectly competitive market, the price is determined by the interaction between supply and demand. Since there are many sellers and buyers, no single entity has the power to influence the market price.
Demand and Supply Curves
- The demand curve is downward sloping, indicating that as price decreases, quantity demanded increases.
- The supply curve is upward sloping, showing that as price increases, quantity supplied increases.
Equilibrium Price
- The equilibrium price occurs where the demand and supply curves intersect.
- At this point, the quantity demanded by consumers equals the quantity supplied by producers.
Characteristics of Perfect Competition
- Many buyers and sellers: No single participant can influence the market price.
- Homogenous products: Each firm sells an identical product, making them price takers.
- Free entry and exit: Firms can easily enter or exit the market based on profitability.
Output Determination
- Firms maximize profit by producing at a level where Marginal Cost (MC) equals Marginal Revenue (MR).
- In the short run, firms can make supernormal profits or incur losses. However, in the long run, the entry and exit of firms will drive profits to zero, leading to normal profits.
Long-Run Equilibrium
- In the long run, the market reaches a point where firms earn no economic profit (normal profit).
- Supply adjusts to meet demand, ensuring that resources are efficiently allocated.
In summary, under perfect competition, price and output are determined through the interplay of demand and supply, leading to an equilibrium where firms operate efficiently and earn normal profits in the long run.