Profit maximizing firms will make their hiring and salary decisions by comparing

Question

Quizplus · Accepted Answer

Marginal benefits and costs of hiring one more worker. This is because firms maximize their profits by adding workers until the marginal cost of hiring an additional worker equals the marginal benefit of that worker's production. Total costs and benefits are important, but they are not as useful in determining the optimal level of employment as marginal costs and benefits.

Profit Maximizing Firms Will Make Their Hiring and Salary Decisions