Consider labour that is hired for $18 per hour.If the last hour hired produces 8 units of output which sells for $2 per unit,that labour- hour adds _ to the firm's profit and so labour should be hired.
A)$16; less
B)$16; more
C)$0; no
D)- $2; less
E)- $128; more

Question

Quizplus · Accepted Answer

The revenue from the last hour of labor is 8 units * $2 = $16. The cost of hiring the labor is $18. Therefore, the labor hour adds -$2 to the firm's profit, indicating that hiring less labor would be more beneficial.

Consider Labour That Is Hired for $18 Per Hour