Kendra Little discusses max degree of parallelism and cost threshold for parallelism:
When you run a query, SQL Server estimates how “expensive” it is in a fake costing unit, let’s call it Estimated QueryBucks.
If a query’s Estimated QueryBucks is over the “Cost Threshold for Parallelism” setting in SQL Server, it qualifies to potentially use multiple processors to run the query.
The number of processors it can use is defined by the instance level “Max Degree of Parallelism” setting.
When writing TSQL, you can specify maxdop for individual statements as a query hint, to say that if that query qualifies to go parallel, it should use the number of processors specified in the hint and ignore the server level setting. (You could use this to make it use more processors, or to never go parallel.)
Read the whole thing, or watch/listen to the video.