Question for Economics Majors...?

Question

What theory or model can I refer to explaining a relationship between production costs and the level of employment (number of employees).

Answer 1

Look up the Law of Diminishing Returns.

Answer 2

every production requires some labor, so relationship between total costs and employment is positive.

if you mean costs per unit of output, adding more labor tends to decrease them up to some point where marginal increase in output from an extra worker becomes less than cost of hiring that worker.

that is all theoryof the firm, from Microeconomics.