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 CMA Foundation: Equilibrium under Perfect Competition  Introduction In a perfectly competitive market, a firm cannot change the price of a product by modifying the quantity of its output. Further, the input and cost conditions are given. Therefore, the firm can alter the quantity of its output without changing the price of the product. We know that a firm is in equilibrium when its profits are maximum, which relies on the cost and revenue conditions of the firm.   Pure or perfect competition is a hypothetical market structure in which the accompanying rules are met: 1. All organizations sell an indistinguishable item (the item is a “ware” or “homogeneous”). 2. All organizations are value takers (they can’t impact the market cost of their item). 3. The piece of the overall industry has no impact on costs. 4. Purchasers have total or “perfect” data—before, present, and future—about the item being sold and the costs charged by each firm. 5. Assets for such work are entirely...