Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
production levels
B
pricing strategies
C
profit maximization
D
revenue generation
Understanding the Answer
Let's break down why this is correct
Answer
Marginal product refers to the additional output gained from hiring one more worker, helping businesses decide how many employees to hire. Similarly, marginal cost is the extra cost incurred when producing one more unit of a good or service, guiding firms on how much to produce. Just as businesses look at the marginal product to determine if hiring more workers is beneficial, they analyze marginal cost to decide if producing an additional item will be profitable. For example, if a factory sees that hiring an extra worker increases production significantly without raising costs too much, it may choose to hire that worker. In both cases, understanding these concepts helps companies make smarter decisions about resources and production.
Detailed Explanation
Marginal cost helps businesses decide how much to produce. Other options are incorrect because Some might think pricing is about costs, but it's really about how much customers will pay; Profit maximization is about making the most money, not directly about costs.
Key Concepts
Marginal Analysis in Hiring
Marginal Cost Analysis
Profit Maximization
Topic
Marginal Analysis in Hiring
Difficulty
medium level question
Cognitive Level
understand
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