Yep. > a firm maximizes profit by producing that quantity of output where marginal revenue equals marginal costs. This is a pretty fundamental result in micro

Yep. > a firm maximizes profit by producing that quantity of output where marginal revenue equals marginal costs. This is a pretty fundamental result in microeconomics. The profit maximization section of the wiki article explains it quite well: https://en.m.wikipedia.org/wiki/Marginal_product_of_labor https://en.m.wikipedia.org/wiki/Marginal_product_of_labor The usual disclaimers about underlying assumptions apply of course.