Concept:In a perfectly competitive market, the firm faces a horizontal demand curve, so price equals marginal revenue.
Explanation:Profit is maximized when marginal revenue equals marginal cost, that is,
MR=MC.
For a perfectly competitive firm, price is fixed by the market, so
P=MR.
Therefore, profit maximization occurs where
P=MR=MC.
This condition holds only under perfect competition, where an individual seller cannot influence price.
Answer:A. Perfect competition.