Economists assume that profit-maximizing firms operate in perfectly competitive markets. However, this assumption does not hold in today's global market, as there are many reasons why markets are not perfectly competitive. Refer to the principle of comparative advantage and production costs, and review the reasons why companies do not operate in a perfectly competitive market. • What output strategies might U.S. companies implement to remain profitable when competing with international companies? • How do market demand, costs, pricing, and competition impact these output strategies?