Sal's pizza is thinking of hiring Brad. If hired, he can increase total production by 100 units a week. He would cost the firm $1,000 a week in wages. If the price of each pizza Sal can make is $12,
Ans: Yes, Sal must hire Brad to increases its profit.
Because as shown in the question, that the cost of hiring will be 1000$ which is the marginal cost of the firm.
And by hiring him, the production increases by 100 units and price of the product is 12$. Hence the marginal revenue earned after hiring Bead will be 1200$.
Hence, marginal revenue is greater than marginal cost which concludes that Sal should hire Brad to increase his profit.
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