A competitive firm supplies only a small portion of the total output of all the firms in an industry. Therefore the firm takes the market price of the product as given,choosing its output on the assumption that the price will be unaffected by the output choice. A competitive firm supplies only a small portion of the total output of all the firms in an industry. Therefore the firm takes the market price of the product as given, choosing its output on the assumption that the price will be unaffected by the output choice