Question

Clay's Sandwich Shop is very busy during lunch. The line of customers runs out of shop and down the sidewalk from noon to 1pm. Many people leave without ever being able to buy one of this sandwiches before their lunch break ends. Considering this information, which situation would BEST increase Clay's chances of increasing his profits?

hiring more employees
buying better ingredients
moving to a new location
changing the store hours

Answer 1

hiring more employees

Answer 2

hiring more employees

Step-by-step explanation:

Clay must make a cost benefit analysis, where he compares the marginal labor cost versus the marginal revenue product. Since Clay's restaurant has an excessive amount of customers and some can't even buy a sandwich, his analysis will probably determine that he should hire more workers.

Clay's cost benefit analysis should compare how much money he could make by hiring an extra employee or probably even more than one extra employee.