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According to the marginal decision rule, under which condition should a profit-maximizing firm hire an additional worker?

Answer

The marginal revenue product of labor exceeds the wage.

Explanation

### Why this is right - **A** is correct because added income greater than the wage means the worker contributes more than the worker costs. - **B** is correct because a value below the wage means the cost exceeds the additional income. - **C** is correct because equality is the stated stopping condition. ### The concept The rule compares marginal benefit with marginal cost for an additional unit of labor. It does not require all workers to add the same amount; the manager compares each additional worker's value with the relevant wage. ### The other options - **D. The rule says every worker always adds the same income**: The rule does not state that workers have identical effects on income. ### Terms - **Marginal**: Relating to the effect of adding one more unit. ### Remember The comparison is about the next worker, not an average worker.

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