Mary is considering hiring another worker in an assembly line for Bluetooth speakers.Mary knows the average product of labor is 15 speakers per day.She also believes that the next worker hired will produce an extra 12 speakers per day.A speaker sells for $10.Assuming that the market for speakers is perfectly competitive,Mary should hire another worker:
A)only if the new worker's marginal product is 12 or more.
B)only if the new worker's daily wage is $150 or less.
C)only if the new worker's daily wage is $120 or less.
D)since the marginal product is below the average product.

Question

Quizplus · Accepted Answer

The marginal product of the new worker is 12 speakers per day, and each speaker sells for $10, making the marginal revenue from hiring the new worker $120 per day. Therefore, Mary should hire the new worker only if the daily wage is $120 or less to ensure profitability.

Mary Is Considering Hiring Another Worker in an Assembly Line