In a perfectly competitive market, a firm maximizes profit by producing where which of the following conditions is met?

In a perfectly competitive market, a firm maximizes profit by producing at the level of output where marginal cost equals marginal revenue. This means that the cost of producing one more unit of a good is exactly the same as the revenue gained from selling that unit. When these two values are equal, the firm is not losing money on that extra unit and is making the most profit possible. For example, if a bakery finds that making one more loaf of bread costs $2 and selling it also brings in $2, then they have reached the profit-maximizing point. Producing beyond this point would mean the cost would exceed the revenue, leading to lower overall profits.