A company analyzes its production process and finds that the marginal revenue product of labor is significantly higher than the wage rate. Which of the following actions should the company take based on the principle of resource allocation for profit maximization?

When a company discovers that the marginal revenue product of labor is much higher than the wage rate, it means that each worker is generating more money for the company than what the company pays them. This situation suggests that the company can increase its profits by hiring more workers. The principle of resource allocation for profit maximization tells us that resources, like labor, should be used where they can create the most value. For example, if a factory finds that each additional worker can produce $100 worth of goods but only costs $50 in wages, hiring more workers will lead to higher overall profits. Therefore, the company should consider increasing its workforce to take advantage of this opportunity.