In a perfectly competitive market, the demand curve faced by an individual firm is perfectly elastic, reflecting the firm's inability to unilaterally influence the market price due to the presence of many other sellers offering identical products. This horizontal demand curve indicates that the firm can sell any quantity of its product at the prevailing market price.

The seller has no power to set a price higher than the market price. This is because consumers would simply purchase all their products from another seller, and the seller would ultimately sell no product. While the seller could set a price lower than the market price, the seller would have no need to do so. The seller can sell as many units of the product as desired at the existing market price and receive the highest possible amount of revenue for selling them.

For example, consider a farmer growing and selling strawberries in a market that embodies perfect competition. Since strawberries are a homogeneous product and there are numerous other farmers with identical offerings, this farmer must accept the market price for strawberries. If the market price is $2 per pound, the farmer can sell as many strawberries as they can produce at this price.

However, if the farmer attempts to charge more than $2, buyers will simply turn to other farmers to buy strawberries, leaving the original farmer with unsold stock. If the farmer lowers the price below $2, the farmer will sell the same quantity of strawberries but receive less total revenue. So, the farmer's demand curve is represented by a horizontal line at the market price of $2, emphasizing their role as a price taker in a perfectly competitive market.