By actually changing output levels, they learn by experience what their demand and cost curves look like. In the process, they discover what happens to profit as they change output levels. Through this discovery process, businesspeople seek to find the output level that maximizes profit. As omniscient onlookers, we can describe this process a bit more analytically. A firm should increase its output so long as the marginal revenue earned from additional units of production is greater than the marginal cost of those units.
Marginal revenue is the additional revenue earned by selling one more unit of a product.
Marginal cost is the additional cost incurred in producing one more unit of output. This point maximizes profit. But the process can be succinctly described by the marginal revenue-marginal cost rule.