A firm has a certain amount of capital and land.As it hires more labor,each worker is able to

Question

Quizplus · Accepted Answer

When a firm hires more labor, each worker is able to specialize. Specialization leads to increased productivity, which in turn can lead to higher wages for workers and increased profits for the firm. However, hiring more labor does not necessarily lead to the ability to purchase more capital or land, nor does it necessarily lead to the ability to work more overtime.

A Firm Has a Certain Amount of Capital and Land