Question

The owners of the Cheesy Burger Restaurant must decide how many new employees to add to their existing number of workers. Based on the information below, how many workers should the owners add if a worker earns $9 per hour?

Answer 1

Cheesy Burger should hire four workers

Step-by-step explanation:

Number of Total revenues Marginal Marginal cost

workers per hour revenue per worker

1 $30 $30 $9

2 $48 $18 $9

3 $62 $14 $9

4 $72 $10 $9

5 $80 $8 $9

6 $84 $4 $9

The marginal revenue generated by the fourth worker ≥ marginal cost per worker ($10 ≥ $9).

But the marginal revenue generated by the fifth worker < marginal cost ($8 < $9).