The Bountiful Bakery is considering hiring another pastry chef. The bakery knows the average product of its chefs is 15 dozen croissants per day. It also believes that the next chef hired will produce an extra 12 dozen croissants per day. A dozen croissants sell for $30. The bakery should hire another worker:
A) only if the new chef's marginal product is 12 dozen or more.
B) only if the new chef's daily wage is $450 or less.
C) only if the new chef's daily wage is $360 or less.
D) because the marginal product is below the average product.

Question

Quizplus · Accepted Answer

The bakery should hire the new chef if the additional revenue from the extra croissants produced (12 dozen x $30 = $360) is greater than or equal to the chef's daily wage.

The Bountiful Bakery Is Considering Hiring Another Pastry Chef