Final answer:
The demand curve for a perfectly competitive firm is horizontal or perfectly elastic, allowing the firm to sell any amount at the market price. This contrasts with a monopolist's downward-sloping demand curve. Hence, option c is the correct answer.
Step-by-step explanation:
In the context of a perfectly competitive firm, the demand curve is characterized by a unique feature—horizontality, indicating perfect elasticity. This distinctive attribute arises from the firm's status as a price taker within the broader market. In a perfectly competitive setting, individual firms have negligible market share, rendering them incapable of influencing market prices. As such, these firms can sell any quantity of goods at the established market price, an environment sharply contrasting with a monopoly.
In a monopoly, the demand curve is characterized by a downward slope, signifying that the monopolist must decrease prices to stimulate higher output sales. Unlike perfect competition, where firms accept the existing market price, monopolists possess the power to influence prices by adjusting their output levels.
Within the spectrum lies monopolistic competition, where the demand curve for a firm's goods resides between the extremes of perfect competition and monopoly. While not perfectly elastic like in perfect competition, it also avoids the downward slope seen in a monopoly. Monopolistic competition allows for some degree of pricing flexibility, as firms engage in product differentiation to create a degree of market power, differentiating their goods to some extent and influencing consumer preferences without reaching the level of a full monopoly.