Explain why the profit-maximizing production is found where the marginal cost of production is equal to the marginal revenue of that production

The profit maximizing output is determined at the point where MR = MC because, this the level where the firm is able to receive additional benefit exactly equal to its additional costs incurred in production of that additional unit of output. It is often seen that, producing below this level, makes the marginal revenue earned to be greater than the marginal cost incurred in producing additional units of output. This gives an incentive to the firm to increase its production level, as the firm continues to increase its profits till the point where MR remains greater than MC.At the level where MR = MC, the firm will maximize the level of profits. If on the other hand the firm decides to produce above the level at which MR equals MC, the MC will tend to become greater than MR. This in turn, will make the profits of the firm to decline. Hence the best optimal level to produce is at the level where MR becomes equal to MC. This can be verified by the profit curve of the firm, which is initially increasing as the level of output increases, then reaches its peak and then starts declining. The peak of the profit curve happens when the MR becomes equal to MC.