In a perfectly competitive market, what condition must hold true for firms to maximize their profits?

In a perfectly competitive market, firms maximize their profits by producing at a level where their marginal cost equals the market price. This means that the cost of producing one more unit of a product should be the same as the price that consumers are willing to pay for that unit. If a firm produces less than this level, it could make more money by increasing production, and if it produces more, it will incur higher costs than the revenue it earns. For example, if a bakery finds that it costs $2 to make one more loaf of bread, and the market price is also $2, the bakery is at the best point for profit. Thus, the key idea is that profit maximization occurs when production aligns with the cost of making additional units matching the selling price.