Mr.Smith's firm is currently hiring 30 workers.The value of marginal product of the last worker is $7.00 per hour.The wage rate is $8.00 per hour.To increase profit,Mr.Smith should
A) continue hiring 30 workers because the firm earns a surplus of $1.00 on each worker hired.
B) increase the price of the firm's product so that the value of marginal product increases to $8.00 per hour.
C) decrease the price of the firm's product so that the value of marginal product increases to $8.00 per hour.
D) decrease the number of workers until the value of marginal product of labour equals $8.00.
E) increase the number of workers until the value of marginal product of labour equals $8.00.
Correct Answer:
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