The correct answer is: D. parallel to the y-axis
A firm in perfect competition is a price taker, which means that it has no control over the price of its product. The demand curve for a firm in perfect competition is therefore perfectly elastic, or parallel to the y-axis. This means that the firm can sell as much or as little of its product as it wants at the market price.
Option A is incorrect because a downward-sloping demand curve is characteristic of a monopoly or an oligopoly. In these market structures, the firm has some control over the price of its product, and therefore the demand curve is downward-sloping.
Option B is incorrect because a rectangular hyperbola is the demand curve for a firm in monopolistic competition. In this market structure, the firm has some control over the price of its product, but there are many other firms selling similar products. The demand curve is therefore downward-sloping, but it is also very flat.
Option C is incorrect because a demand curve that is parallel to the x-axis is characteristic of a perfectly competitive market. In this market structure, the firm has no control over the price of its product, and therefore the demand curve is perfectly elastic.