In a perfectly competitive market, firms are considered _______ because they cannot influence the market price and must accept the prevailing price determined by supply and demand.

In a perfectly competitive market, firms are considered price takers because they have no power to change the market price. This means that each dairy farm, for example, must sell its milk at the price set by the overall supply and demand in the market. If a dairy farmer tries to charge more than the market price, customers will simply buy from another farm that sells at the lower price. Since there are many farmers producing similar products, no single farmer can influence the price. This situation encourages efficiency and ensures that prices reflect the true cost of production in the dairy industry.