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The optimal condition for a firm regarding Marginal Cost is when Marginal Cost equals Marginal Revenue. This fundamental principle in economics indicates that a firm maximizes its profit by producing an additional unit of output where the cost of producing that unit (Marginal Cost) is equal to the revenue generated from selling that unit (Marginal Revenue).

When Marginal Cost is equal to Marginal Revenue, the firm is at a point where producing one more unit does not increase profit. If Marginal Cost were to be less than Marginal Revenue, the firm would benefit by producing more units since each additional unit sold would contribute positively to profit. Conversely, if Marginal Cost is greater than Marginal Revenue, producing more units would decrease profit because the cost of making those units would outweigh the revenue from sales.

Understanding this relationship allows firms to determine the optimal level of production and avoid inefficiencies. This principle is fundamental in guiding decision-making in production and pricing strategies.