The profit in a perfectly competitive market is the one that maximizes the economic benefits (the sum of consumer and producer surplus).

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In a perfectly competitive market, firms have no market power and must accept the market price determined by supply and demand. Therefore, to maximize profits, firms will produce at the level where marginal cost equals market price. This level of production will also maximize economic benefits as it ensures that both consumers and producers are benefiting from the transaction, thus maximizing consumer and producer surplus. In a perfectly competitive market, firms maximize profits by producing where marginal cost equals marginal revenue. This quantity will be the one that maximizes the economic benefits, as it represents the point where the value consumers place on a good or service (measured by their willingness to pay) is exactly equal to the value producers place on it (measured by their cost of production). Therefore, the profit that maximizes these economic benefits will also maximize consumer and producer surplus.

The Profit in a Perfectly Competitive Market Is the One