Cindy is a baker and runs a large cupcake shop. She has already hired 11 employees and is thinking of hiring a 12th. Cindy estimates that a 12th worker would cost her $100 per day in wages and benefits while increasing her total revenue from $2,600 per day to $2,750 per day.

Should Cindy hire a 12th worker?

a. Yes

b. No

c. You need more information to figure this out

Question

Business

Clark Richard

10 October, 08:12

Cindy is a baker and runs a large cupcake shop. She has already hired 11 employees and is thinking of hiring a 12th. Cindy estimates that a 12th worker would cost her $100 per day in wages and benefits while increasing her total revenue from $2,600 per day to $2,750 per day.

Should Cindy hire a 12th worker?

a. Yes

b. No

c. You need more information to figure this out

+3

Answers (1)

Know the Answer?

Adrian Chung · Answer 1

A: Yes

Explanation:

The additional worker would cost $100 per day i. e. Marginal Cost = $100

Whereas the Marginal Revenue = (2,750-2,600) = $150

Since Marginal revenue exceeds marginal cost by (150-100) = $50, Cindy should hire 12th worker.