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In a perfectly competitive market, many sellers are available in the market and, all buyers and sellers have information to make a rational decision about a product. Since many sellers are available in the market, thus a single firm cannot influence a perfectly competitive market.

If a single firm increases the price of its product, then it will lose all of its sales because there are many sellers in the market who sell the identical product at a much lower price and buyers also have all information about the product.

Thus, a single firm is enough small that it cannot influence the price of its product to earn extra profit and it has to take the price prevailing in the market which is called market price. Also, it is a very small player that increases or decreases in its output will not much affect the overall quantity supplied.