If an additional worker costs you $15 per hour and can add 10 units of output to the firm, you should hire that person as long as
A)The value of marginal product is above $15
B)10 remains above $15
C)Your output is maximized
D)Demand for your product is increasing

Question

Quizplus · Accepted Answer

Hiring an additional worker is profitable only if the value of marginal product (VMP) exceeds the cost of hiring that worker. In this case, the cost is $15 per hour, and the worker can add 10 units of output. Therefore, if the VMP of the worker is above $15, then it is profitable to hire the worker.

If an Additional Worker Costs You $15 Per Hour and Can