In a perfectly competitive market, a firm maximizes its profit by producing the quantity of output where marginal cost (MC) equals which of the following?

In a perfectly competitive market, a firm maximizes its profit by producing the quantity of output where marginal cost (MC) equals marginal revenue (MR). Marginal cost is the cost of producing one more unit of a good, while marginal revenue is the income received from selling one more unit. When a firm produces at the point where MC equals MR, it means that the cost of making an additional unit is exactly covered by the revenue earned from selling it, leading to maximum profit. For example, if a bakery sells cakes and finds that making one more cake costs $15 and it can sell that cake for $15, it should produce that cake because it won’t lose money. If the bakery were to make more cakes and the cost exceeded the revenue, it would start losing profit.