In the context of perfect competition in dairy markets, which of the following statements correctly describe the behavior of firms? Select all that apply.

In a perfectly competitive dairy market, firms are price takers, meaning they cannot set their own prices but must accept the market price determined by supply and demand. This is because there are many dairy farmers producing identical products, like milk, which makes it easy for consumers to switch from one farmer to another if prices change. Since firms cannot influence the market price, they focus on maximizing their profits by producing the quantity of milk where their marginal cost equals the market price. For example, if the market price of milk is $3 per gallon and it costs a farmer $2 to produce each additional gallon, the farmer will keep producing until the costs rise to match the price. Overall, firms in perfect competition are driven by the need to be efficient and responsive to market changes to survive and thrive.