Which of the following scenarios best exemplifies the characteristics of a perfectly competitive market in the dairy industry? Classify each scenario based on the underlying economic principles.

A perfectly competitive market is one where many sellers offer identical products, and no single seller can control the market price. In the dairy industry, this means that many farmers produce milk that is similar in quality, and consumers have many choices. For example, if one farmer tries to raise their milk price, customers will simply buy from another farmer with a lower price. Since milk is a standard product and there are many producers, no one farmer can influence the market, which leads to prices being set by supply and demand. This situation illustrates the key idea of perfect competition, where all sellers are price takers, and consumers benefit from the variety and pricing options available.