You operate a shop that repairs TVs and VCRs.The going wage rate in a competitive market for skilled repair people is $18 per hour.Given the current demand for your services,the marginal revenue product of your repair people is $28 per hour.
-You should

Question

Quizplus · Accepted Answer

The marginal revenue product of repair people is greater than the wage rate in a competitive labor market. This indicates that the demand for repair services is high relative to the supply of skilled repair people. By increasing the number of repair people working for you, you can take advantage of this opportunity to increase profits. However, it is important to make sure that the additional revenue generated by hiring more repair people exceeds the additional cost of paying their wages.

You Operate a Shop That Repairs TVs and VCRs