Tja, with more competition the price (should) approach production cost.
For any single producer your statement is true of course, if they raise prices of people will just buy from the other producers. But for the product at large the price should (with perfect competition) stabilise at a point where all the producers would make more if they all increased prices together (so consumers are actually willing to pay more, but because of competition the price is lower).
Epa095|2 years ago
For any single producer your statement is true of course, if they raise prices of people will just buy from the other producers. But for the product at large the price should (with perfect competition) stabilise at a point where all the producers would make more if they all increased prices together (so consumers are actually willing to pay more, but because of competition the price is lower).