In a perfectly competitive market, if a firm is currently producing at a level where marginal cost exceeds marginal revenue, what should the firm do to maximize profit?

In a perfectly competitive market, when a firm finds that its marginal cost is greater than its marginal revenue, it means that producing one more unit of the product is costing more than the money it would make from selling that unit. To maximize profit, the firm should reduce its production level. This is because if the cost of making an additional unit is higher than the revenue from selling it, the firm is losing money on that unit. For example, if a bakery sells cakes for $20 each but it costs $25 to make one more cake, the bakery should make fewer cakes to avoid losing money. By decreasing output until marginal cost equals marginal revenue, the firm can improve its profitability.