Suppose a competitive firm pays a wage of $12 an hour and sells its product at $3 per unit. Assume that labor is the only input. If hiring another worker would increase output by five units per hour, then to maximize profits the firm should
A) hire the additional worker.
B) lay off some of its workers.
C) not change the number of workers it currently hires.
D) There is not enough information to answer the question.
A
Economics