In a perfectly competitive market, a firm maximizes its profit when it produces at a level where marginal cost equals which of the following?

In a perfectly competitive market, a firm maximizes its profit when it produces at a level where marginal cost equals marginal revenue. Marginal cost is the cost of producing one additional unit of a product, while marginal revenue is the income earned from selling that additional unit. When a firm produces where these two values are equal, it ensures that the cost of making one more unit is exactly covered by the money it receives from selling that unit, meaning it is not losing money on that production. For example, if a bakery finds that making one more loaf of bread costs $2 and sells that loaf for $2, it is at the profit-maximizing level because the costs and revenue match. This balance allows the firm to make the most profit without incurring losses on additional production.