Final answer:
A "price taker" firm in a competitive market accepts the market-determined equilibrium price, has little influence on this price, and exists among many similar firms. Easy entry and exit from the market are characteristic, and any attempt to raise prices can result in losing all sales.
Step-by-step explanation:
A firm operating in a competitive market or being a "price taker" firm entails specific characteristics. One key aspect is that such a firm must accept the prevailing equilibrium price in the market; any attempt to increase the price may lead to losing all sales to competitors. This is because there are many sellers offering similar or identical products, leading to the firm having little to no influence on the market price. The market conditions are dictated by the forces of supply and demand on a larger scale, not by individual firms, especially since these firms are quite small in the context of the entire market. Furthermore, easy entry and exit from the market are typical, allowing firms to respond to market conditions without significant barriers.
Some incorrect characteristics that are not indicative of a price taker firm or a competitive market would include the firm selling at lower prices to attempt to drive competitors out of business, or the market being dominated by a single or a few competitors. These actions are more representative of monopolistic or oligopolistic market structures.