The profit-maximizing level of employment is the quantity of labor where

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The profit-maximizing level of employment is where the marginal revenue product (MRP) is equal to marginal cost (MC). This is because MRP represents the additional revenue generated by hiring one more unit of labor, and MC represents the additional cost of hiring one more unit of labor. At the point where MRP=MC, the firm is maximizing profit because the cost of additional labor is exactly offset by the additional revenue it generates.

The Profit-Maximizing Level of Employment Is the Quantity of Labor