Profit maximization occurs at the output level where __________ equals __________.

Profit maximization occurs at the output level where marginal cost equals marginal revenue. This means that a business should continue to produce more goods as long as the money it makes from selling one more unit (marginal revenue) is greater than the cost of making that extra unit (marginal cost). Once the cost to produce one more unit is equal to the money earned from selling it, the business has reached its highest profit point. For example, if a toy company finds that making one more toy costs $5, and selling it brings in $5, then they should stop producing more toys because they won't make any extra profit. Understanding this balance helps businesses make smart choices about how much to produce.