If an additional worker costs you $15 per hour and can add 10 units per hour of output to the firm, you should hire that person as long as
A)the value of marginal product is between $10 and $14.
B)the product price is at least $1.50.
C)the marginal product of the worker is greater than the value of the marginal product.
D)demand for your product is increasing and you sell in a competitive market.

Question

Quizplus · Accepted Answer

The value of the marginal product is calculated by multiplying the marginal product (additional output) by the price of the product. If the product price is at least $1.50, then 10 units would generate at least $15 (10 units * $1.50 = $15), which equals or exceeds the cost of the additional worker, making it a worthwhile hire.

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