To maximize its profits, any firm must hire each factor of production to the point where the
factor’s marginal revenue product just equals the factor’s price.In Chapters 9 and 10 , we saw the firm varying its output until the
marginal cost of producing another unit was equal to the marginal
revenue derived from selling that unit. Now we see the same profit-
maximizing behaviour in terms of the firm varying its inputs until the
marginal cost of another unit of input is just equal to the extra revenue
derived from selling that unit’s marginal product.