The general rule governing the hiring of workers is to

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The best choice is to equate marginal labour cost to marginal labour benefit. This ensures that each additional unit of labour being hired is contributing more to revenue than it costs to hire them. This ensures that the firm is maximizing its profitability while still hiring the necessary workers to operate the business. Minimizing labour cost or cost per unit may result in hiring too few workers and having a negative impact on productivity and profitability. Equating total labour cost to total labour benefit does not take into account the efficiency of each worker and may result in hiring too many or too few workers. Maximizing marginal product may not be feasible as eventually adding more workers may result in diminishing returns.

The General Rule Governing the Hiring of Workers Is to