📚 Learning Guide
Marginal Analysis in Hiring
medium

Marginal product is to hiring decisions as marginal cost is to:

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Learning Path
Learning Path

Question & Answer
1
Understand Question
2
Review Options
3
Learn Explanation
4
Explore Topic

Choose 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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