Can you think of any examples of purely competitive firms? For example, have you been to New York City and seen the number of vendors selling hot dogs on the street? These vendors have relatively low entry costs and can stop selling these hot dogs anytime. What would happen if the going rate for a hot dog from one of these vendors was $2.00, and another vendor started selling the same hot dog for $1.50? Why?

Which characteristic of perfect competition ensures that perfectly competitive firms are not able to determine the price of their