Option 1 -> In perfect competition, firms are price takers, so MR is constant, not downward sloping.
Option 2 -> In perfect competition, the firm can sell any quantity at the market price, making MR horizontal at that price.
Option 3 -> A vertical MR curve would imply fixed quantity regardless of revenue, which is incorrect.
Option 4 -> MR does not increase with quantity in perfect competition; it remains constant.
Hence, Option 2: Horizontal -> In a perfectly competitive market, individual firms are price takers and face a perfectly elastic demand curve. Since the firm can sell any quantity at the prevailing market price, the price remains constant regardless of output. Therefore, Marginal Revenue (MR) equals Price (P) and remains constant, creating a horizontal MR curve at the market price level. This is a key characteristic distinguishing perfect competition from monopolistic or imperfectly competitive markets where MR is downward sloping -> correct