When a firm hires an additional worker, the firm's output and the firm's total cost________ .

Question

Quizplus · Accepted Answer

When a firm hires an additional worker, it is likely to increase the output. This is because the new worker can contribute towards the production process. At the same time, the total cost of the firm is also likely to increase because the new worker needs to be paid a wage. Therefore, the correct option is A – increases; increases.

When a Firm Hires an Additional Worker, the Firm's Output