A firm is considering adopting a plan in which the company pays employees less than their MRP_L early in their careers and more than their MRP_L late in their careers.

For a typical worker at the firm, MRP_L =

10 + 0.1T, where T = the number of years that the worker has been employed at the firm and MRP_L is measured in dollars per hour. The worker’s wage per hour is W = 8 + 0.2T. Assume that this wage is high enough to attract workers from alternative jobs, that the discount rate for the firm is zero, and that the expected tenure of a typical worker is 35 years. If workers retire after 35 years, will this plan be profitable for the firm? Explain. For how many years will the firm underpay its workers?