A perfectly competitive firm will maximize profits when the:

A) marginal revenue equals marginal cost.
B) marginal revenue is lower than average variable cost.
C) price is lower than marginal cost.
D) price is higher than marginal cost.

Marginal Revenue

The additional earnings gained by selling an extra unit of a good or service.

Marginal Cost

Expenses incurred in creating one more unit of a product.

Perfect Competition

A market structure characterized by a large number of buyers and sellers, identical products, and no barriers to entry or exit.