The marginal product of a new worker is 80 units and the marginal expense of a new worker is $800.The marginal product of hiring current workers another hour is 10 units and the marginal expense of hiring current workers another hour is $12.If the firm needs extra hours of work (assuming the work could be done by either the new or current workers),it should

Question

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The firm should hire new workers because the cost per unit of output is lower ($800/80 = $10) compared to hiring current workers for more hours ($12/10 = $1.2 per unit).

The Marginal Product of a New Worker Is 80 Units