A perfect competitor will maximize profit by producing at the output level where marginal cost (MC) equals marginal revenue (MR). The firm will continue to expand output as long as the marginal revenue from producing an additional unit exceeds the marginal cost of producing that unit (MC < MR). However, the firm will stop expanding output when the marginal cost equals marginal revenue (MC = MR). If the marginal cost exceeds the marginal revenue (MC > MR), the firm will decrease its output.