Honest John s law firm currently charges a $500 fee per lawsuit and litigates 40 cases per month. John, the firm s president, believes that reducing the fee to $450 per case would increase the firm s caseload to 50 per month. The firm could handle these additional cases if it hired one more lawyer at a monthly salary of $3000. Should the firm make these changes? (Select one answer)
- Yes, the change would increase the firm?s revenues by $4500, which is more than the $3000 cost of hiring the new attorney.
- No, the change would only increase the firm?s revenues by $2500, which is less than the $3000 cost of hiring the additional attorney.
- It doesn?t matter, the firm?s profits will be unaffected by this change.
- Yes, the changes would increase the firm?s revenues by $7500, which is more than the $3000 cost of hiring the additional attorney.
- The question cannot be answered from the information provided.