Question: According to the rule for optimal input usage, a firm should hire a person as long as the marginal revenue product is greater than the
According to the rule for optimal input usage, a firm should hire a person as long as the marginal revenue product is greater than the marginal cost to the company. It is well known that many companies have management training programs in which new trainees are paid relatively high starting salaries and are not expected to make substantial contribution to the company until after the program is over (programs may run between 6-18 months). In offering such training programs, is a company violating the optimality rule? Explain.
Explain the relationship between marginal product to equal average n marginal product and average product. Why can we expect marginal product to equal average product's maximum point?
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