Final answer:
The execution of a market order to sell typically happens at the highest available offer in the market. Firms in a perfectly competitive market can sell at the market price, but they need to balance total revenue with total costs to maximize profits.
Step-by-step explanation:
The execution of a market order to sell typically occurs at the highest offer in the market. In a perfectly competitive market, many sellers and buyers participate and have freedom to enter and exit the market. Given the scenario that sellers offer identical products and all participants are well-informed, a market order to sell at the highest offer ensures immediate transaction. However, selling a higher quantity doesn't necessarily increase profits if the increase in total revenue doesn't offset the total cost.
In the case of a perfectly competitive firm, the firm can sell as much as it wishes at the market price, but it cannot simply increase its profits by selling an extremely high quantity due to the market's equilibrium price; this is where quantity supplied matches quantity demanded. Thus, each firm must compare its total revenue with total cost to determine the most profitable output level.