Arrange the following steps in the correct order regarding the impact of increased labor productivity on a firm's hiring decisions: A) The firm evaluates the new marginal revenue product resulting from increased productivity. B) The firm compares the new marginal revenue product with the marginal factor cost. C) The firm decides whether to hire more workers based on the comparison. D) The firm implements the new technology that enhances labor productivity.

To understand how increased labor productivity affects a firm's hiring decisions, we start with the firm implementing new technology that enhances productivity. After the technology is in place, the firm evaluates the new marginal revenue product, which is the additional revenue generated from hiring one more worker. Next, the firm compares this new marginal revenue product with the marginal factor cost, which is the cost of hiring an additional worker. Based on this comparison, the firm then decides whether to hire more workers or not. For example, if the new productivity leads to higher revenue that exceeds the cost of hiring, the firm will likely choose to hire more workers.