Is the horizontal demand curve for a firm in perfectly competitive market structure implies demand is perfectly elastic?why??
Yes, the horizontal demand curve for a firm in a perfectly competitive market structure implies that demand is perfectly elastic. This is because in a perfectly competitive market, there are numerous firms producing identical goods and consumers have no preference for one firm's product over another. As a result, each individual firm has very little market power and its actions have no impact on the market price. As a consequence, the firm has to accept the market price as given and cannot influence it.
In this scenario, if a firm were to increase its price even slightly above the market price, it would lose all of its customers to other firms offering the same product at the market price. Similarly, if the firm were to decrease its price slightly below the market price, it would gain a few customers but not enough to offset the loss in revenue from the lower price. Therefore, the firm's demand curve is perfectly elastic, as any quantity it chooses to produce and sell will be purchased by consumers at the market price.