In the short run,if a perfectly competitive firm chooses to produce,then its profits are maximized by producing the quantity of output where marginal cost equals marginal revenue.

Perfectly Competitive

A market structure characterized by many buyers and sellers, where no single entity has a significant impact on prices.

Short Run

A period in which at least one factor of production is fixed, limiting the ability to adjust production rapidly.

Profits

The financial gain obtained when the revenue from business activities exceeds the expenses, taxes, and costs associated with maintaining the business.