At that point markets clear, utility is maximized, lions are beaten into plowshares, bread walks on wine, and so on. And it only takes a few more curves and diagrams to show how free markets inexorably lead you to that point. Having been inducted into the faith in college, I'm a fairly devout believer in the basic doctrines. These doubts affect many other members of the church. Most suffer in silence, while some join schismatic sects such as the notorious Galbraithian heresy.
Marginal cost is the cost of producing one more unit.
Doctrine holds that in a free market, competition will make price equal to marginal cost, because anyone attempting to charge more will get undercut by a rival, and anyone who charges less will lose money. Each producer increases production until the cost of producing the next unit starts to exceed the price she can get. Essentially, rising marginal costs determine the supply curve. Now, I yearn for market-clearing equilibrium as much as the next fellow. But the whole doctrinal contraption involves two difficult assumptions.