Within the framework of the pure competitive model, a price taker will always produce a quantity of output that: Brings average total cost and price into equality. In a perfectly competitive market, where firms are price takers, each firm faces a horizontal demand curve at the market price. To maximize profit, the firm produces where marginal cost equals marginal revenue, which is also where average total cost equals price. This occurs at the point where the firm's cost per unit of output (average total cost) equals the price it can sell the output for. At this point, the firm is neither making nor losing economic profit