In a perfectly competitive market, what is expected of participants?

In a perfectly competitive market, participants are indeed price takers due to market conditions. This means that individual buyers and sellers do not have the ability to influence the market price of a good or service. The price is determined by the overall supply and demand in the market. Because there are many buyers and sellers of identical products, each participant must accept the market price as given. If a seller tries to set a price above the market level, they will not be able to sell any goods because buyers can easily purchase the same product from another seller at the lower market price. Conversely, if a buyer tries to offer a price below the market price for a good, sellers will not accept that offer when they can sell at the prevailing market rate. This fundamental characteristic ensures that all participants operate within the constraints of the market dynamics, reinforcing their role as price takers.