Final answer:
The correct answer is option c. In a perfectly competitive market, the demand curve for any given firm is perfectly elastic, indicating it is horizontal because the firm can sell any quantity at the market price. Therefore, the correct answer to the question is option (c), the demand curve will be horizontal.
Step-by-step explanation:
If consumers view the output of any firm in a market to be identical to the output of any other firm in the market, this describes a scenario of perfect competition. In such markets, no single firm has any market power to influence the price of its product, leading to the firm being a price taker. Therefore, the demand curve faced by any given firm in a perfectly competitive market is perfectly elastic. This suggests that the firm can sell any quantity at the prevailing market price and cannot charge more than the market price because consumers would switch to buying from other firms. Accordingly, since firms can sell as much as they want at the market price, the demand curve for the output of any given firm will be horizontal.
The key distinction here is between a perfectly competitive firm and a monopolistic firm, a distinction that is crucial for understanding how demand curves differ across different market structures. A monopolist, for example, faces the market demand itself, which is typically downward sloping, indicating the monopolist can sell more only by reducing its price. Conversely, the perfectly competitive firm faces a horizontal demand curve, indicating how any amount of output will be sold at the same market price.
Summing up, in a market where all firms are viewed equally by the consumers, the demand curve for the output of any firm will be horizontal, which means the correct answer to the question is option (c).