A firm is a price taker, not a price maker, under perfect market conditions because the existing market price cannot be improved upon. It is the correct price to set the balance between supply and demand and enable suppliers (i.e. the firm) to make a profit. Thus, the firm must take the price set by the market to sell its goods.
If the firm tries to establish its price above the market level, consumers will bypass this particular firm because under perfect market conditions there are multiple other firms selling a similar item at the market price. This means that if the firm tries to charge a premium, unless it can convince consumers that its product offers a differentiated competitive advantage that warrants a premium, people will just purchase the item from other firms.
It also means that if the firm tries to sell the item at a discount to gain market share from its competitors, it will lose money with each sale because the price that has been established by the market under perfect conditions sits at the point of intersection between the two dynamic market forces of supply and demand and incorporates enough of a profit to make it worthwhile for suppliers to maintain sales, but not a wide enough profit to attract new entrants to the market. This is because under perfect market conditions, there are already the right—or perfect—number of suppliers engaged in selling the product.
If the firm tries to sell the product at a premium, it will not gain traction with consumers and if it tries to sell at a discount, it will lose money. Under perfect market conditions, the firm must be a price taker and not a price maker. If there were only a handful of suppliers in the market, which does not characterize “perfect” market conditions, the firm could have more influence on prices.