What does MC = MR indicate for both perfect competition and less than perfect competition? Why is it important?

For all firms (regardless of market structure), profits are maximized at the output level where marginal revenue equals marginal cost. If MR is greater than MC, the firm will profit from producing and selling this unit of output, so they should produce more. If, on the other hand, MR is less than MC, firms will incur a loss by producing this unit, so they should produce less. Therefore, profits will be maximized at the when the revenue from the last unit produced is exactly equal to the cost incurred from that unit. This information is important because it allows firms to make the production decision that will result in their profits being maximized, which is the top goal of businesses.