If a company finds that the Marginal Revenue Product of Labor is decreasing, what does it imply about their hiring strategy?

When a company notices that the Marginal Revenue Product of Labor (MRP) is decreasing, it means that each additional worker they hire is contributing less and less to the company's revenue. This could happen because the company has already hired enough workers to meet its needs, so adding more doesn’t lead to significant increases in output or sales. For example, if a bakery has enough staff to bake a certain number of loaves of bread, hiring one more baker might only produce a few extra loaves that aren’t enough to cover the cost of the new worker. As a result, the company might need to reconsider its hiring strategy, possibly by slowing down hiring or focusing on improving efficiency rather than simply adding more labor. Ultimately, this situation suggests that the company should evaluate how many workers it truly needs to maximize its profits.