In the context of short-run production, how does the concept of marginal cost relate to marginal utility when considering the allocation of resources?

In short-run production, marginal cost refers to the extra cost of producing one more unit of a good or service. This is important because it helps businesses decide how much to produce based on the resources they have. Marginal utility, on the other hand, is the additional satisfaction or benefit a consumer gets from consuming one more unit of a product. When businesses consider both marginal cost and marginal utility, they aim to produce at a point where the cost of making another unit is equal to the satisfaction it provides to consumers. For example, if a bakery finds that making one more loaf of bread costs $2 and consumers are willing to pay $2.