A firm is considering hiring additional workers to increase production. If the price of the output is $20 per unit and the marginal revenue product of the additional worker is $100, how many additional units does the firm need to produce to justify hiring this worker?

To decide whether to hire an additional worker, the firm needs to compare the additional money it would make from that worker to the cost of hiring them. The marginal revenue product (MRP) of the worker is $100, which means the worker can help the firm earn an extra $100 from production. Since the price of each unit is $20, the firm must determine how many units need to be produced to reach that $100. To find this, you divide the MRP by the price per unit: $100 divided by $20 equals 5 units. This means the firm needs to produce 5 additional units to justify hiring the worker, as this would bring in enough revenue to cover the cost of the new employee.