In a perfectly competitive market, which condition indicates that a firm is maximizing its profit?

In a perfectly competitive market, a firm maximizes its profit when it produces the quantity of goods where its marginal cost equals the market price. Marginal cost is the cost of producing one more unit of a product, and when this cost matches the price at which the product is sold, the firm is making the most profit possible. For example, if a company can sell a widget for $10 and it costs them $10 to make one more widget, they shouldn't produce that extra widget because it won't increase their profit. Instead, they should focus on producing where their costs and prices align, ensuring they are not losing money on additional production. This balance helps the firm operate efficiently and ensures that resources are used wisely in the market.