The price charged by a perfectly competitive firm is determined by

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In a perfectly competitive market, the price is determined by the market demand and market supply. Each firm is a price taker and has no influence over the market price. The firm simply produces at the market price and adjusts its quantity supplied according to its cost structure. Cartels come together to collude and act as a monopolist, but this is not a feature of a perfectly competitive market. The price cannot be determined solely by the firm's costs, whether it be total costs or average variable cost.

The Price Charged by a Perfectly Competitive Firm Is Determined