In marginal analysis, the point at which __________ happens is critical for determining the optimal output level.

In marginal analysis, the point at which marginal cost equals marginal revenue is critical for determining the optimal output level. When the extra cost of producing one more unit equals the extra revenue it brings, producing beyond that point would reduce profit, and producing less would leave money on the table. Thus firms should produce up to the point where the two curves intersect. For example, if producing the 10th unit costs $5 and brings in $5 in revenue, the firm should stop after the 10th unit because any further unit would cost more than it earns. This equality marks the profit‑maximizing quantity.