Who is/are considered to be the price taker under the perfect competition?

both 1 and 2

The correct answer is Option 3: both 1 and 2

In a perfectly competitive market, both buyers and sellers are price takers, meaning:

1️⃣ Sellers (Firms) are price takers →

• There are many firms producing homogeneous products (identical goods).
• No individual firm can influence the price, so they must accept the market price set by industry-wide supply and demand.
• If a firm tries to charge a higher price, buyers will switch to other sellers offering the same product at the market price.

2️⃣ Buyers are also price takers →

• Since many buyers exist, no single buyer can influence the price.
• Buyers accept the prevailing market price and decide only how much to buy, not at what price.