In a competitive market, when a firm increases production, it must consider the relationship between marginal costs and _______ to maximize profit. A firm will only produce additional units as long as the marginal cost is less than the _______.

In a competitive market, when a firm increases production, it must consider the relationship between marginal costs and marginal revenue to maximize profit. Marginal cost is the extra cost of producing one more unit, while marginal revenue is the extra money earned from selling that unit. A firm will only produce additional units as long as the marginal cost is less than the marginal revenue. For example, if producing one more toy costs $5 but selling it brings in $10, the firm should produce that toy because it will increase profit. However, if the cost rises to $12, the firm should not produce it, as it would lead to a loss.