Arrange the following steps in the correct order for a firm in perfect competition to maximize profits: A) Set output level where marginal cost equals marginal revenue, B) Adjust production to ensure average total cost is minimized, C) Identify market price based on supply and demand, D) Determine profit by subtracting total cost from total revenue.

To maximize profits in a perfectly competitive market, a firm must first identify the market price based on supply and demand, which helps them understand how much they can sell their product for. Next, the firm should adjust its production to ensure that average total cost is minimized, allowing it to operate efficiently. After that, the firm will set the output level where marginal cost equals marginal revenue, which is the point at which producing one more unit will not increase or decrease profits. Finally, the firm can determine its profit by subtracting total cost from total revenue, giving a clear picture of how well it is performing financially. For example, if a bakery finds that it can sell bread for $3 per loaf, it will adjust its baking to minimize costs and then produce loaves until the cost of baking one more loaf equals $3 to maximize profits.