We are told that, for an individual firm in a perfectly competitive market, its demand curve is a horizontal line. What is the reason behind this?

A. The consumers for this firm are very abnormal: they are not going to respond to any changes in the firm's price!

B. All firms in a perfectly competitive market are independent decision makers, who can choose his/her own price and output quantity.

C. Each firm in a perfectly competitive market is a very small portion of the total market supply, like a drop of water in the ocean. Thus, each individual firm's output decision has virtually no effect on market price.

D. Each consumer in a perfectly competitive market is a very small portion of the total market demand, like a drop of water in the ocean. Thus, each individual consumer's quantity response has virtually no effect on the market demand curve.