Assume the marginal expense of hiring another employee


Decision making on profit maximization using marginal analysis.

Assume the marginal expense of hiring another employee is $150 and the marginal expense of hiring current employees for an extra hour is $10. The added output associated with an added employee, holding both capital and average hours per employee constant, is 120. The added output generated by increasing average hours per employee, holding capital and the number of employees constant, is 7. If the firm is interested in maximizing profits, What should it do?

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Business Economics: Assume the marginal expense of hiring another employee
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