The demand curve for a perfectly competitive firm is perfectly horizontal because:

A. It cannot obtain a higher price by restricting its output, nor does it need to raise its price to increase its sales volume.
B. It cannot obtain a higher price by restricting its output, nor does it need to lower its price to increase its sales volume.
C. It cannot obtain a higher price by increasing its output, nor does it need to lower its price to increase its sales volume.
D. It cannot obtain a lower price by restricting its output, nor does it need to lower its price to increase its sales volume.

In a perfectly competitive market, firms face a perfectly elastic demand for their products, resulting in a horizontal demand curve where they can sell any quantity at the market price.

Explanation:

In a perfectly competitive market, a firm's demand curve is perfectly horizontal because it faces a perfectly elastic demand for its product. This means that the firm must accept the market price and can sell any quantity at that price, leading to a horizontal demand curve. By setting prices equal to the market price, firms in perfect competition maximize their profits.

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