Explanation:

There are a very large number of buyers and sellers in a perfectly competitive market and since there is no monopoly of a single firm, all firms jointly take the prices.

Marginal cost means the cost of producing one additional unit of product. Marginal revenue is the price that every additional unit will fetch in the market. This is based on the demand of the buyers.

The equilibrium market price of goods is a point where marginal cost becomes equal to the marginal revenue.

This is one the most fundamental concepts of economic theory and used by many industrial firms in deciding the amount of output and prices. There have been instance when questions on the ‘marginal’ concept have been asked by UPSC.