When several firms operate in a market there is competition. They all aim to gain the largest market share (proportion of total consumers) as possible.
If one the firms offers the same product at a lower price, many consumers will leave other suppliers and buy the product from that cheaper competitor. Other firms are forced to lower the price too, not to lose all the customers on behalf of the first, or to increase the quality or attractiveness of its products so that consumers stay, instead of switching to the other cheaper option.
