You do know this has a serious, if fictional, set of answers, right?

So, mythology. It's essentially mankind's collective imagination refining stories over generations, passing them down and getting slowly tweaked and changed in the retelling. Until someone writes it down, when that static version becomes canon.

Mermaids are not a single, monolithic thing though. They've existed in multiple cultures, as far back as Babylonian myths.

But, on average, it's the Greek sirens that have mostly been the heart of modern versions, with some significant parts drawn from the fairy tale of the little mermaid.

Now, most of the myths don't even address how mermaids are made at all. Even the ones that make mention of them being creatures that do breed don't exactly get into the nitty gritty.

There's a Chinese version that copulates with humans, and the Greek sirens were seducers. But, most of the worldwide versions are children of gods, nature spirits, or otherwise not "breeding" as a species at all.

There's modern fiction about mermaids, of course, and it tends to fall into two camps. Fish and humanish breeding.

I'm writing this from memory on a C/ that's essentially shitposts, so don't ask for me to go digging for specifics on which writers said what.

However, the fish style breeding is usually written to make it more inhuman, so it's usually laying eggs, but I've seen stories where the fertilization occurred inside the female, and with the eggs being fertilized externally. I read a short story decades ago that had them giving live birth, and they were more sharks than the typical scaled fish type.

For the ones that use more human mating, you have a division where it's them mating with actual humans; mating with mermen, with their genitals being available either by shape changing, or the penis being internal until needed for mating; and hybrids of those ideas.

Now, I do remember one author that covered some actual nitty gritty, but not really. Laurell K Hamilton writes this series that's essentially supernatural erotica, and one of the many side characters is a siren, and they have sex in human form, and interbreed with humans. Which, I can't really recommend that series as good reading, particularly as the series progresses. But it's an okay example of the way modern fiction continues to use mythology as inspiration, and that mermaid mating is something that's addressed.