A manager in charge of new product development can hire engineers and market researchers. The annual salary of an engineer is $40,000, while a market researcher receives $20,000. The marginal contributions of engineers and market researchers are:
Based on the above information, if the manager currently hires four engineers and one market researcher, what must be true?
A. More new products would be developed if she hires fewer engineers and more market researchers.
B. She is making the correct decision because MPE = MPR.
C. More new products would be developed if she hires more engineers and fewer market researchers.
D. She is not making the correct decision because engineers are more productive than market researchers at all levels of output.
Answer: A
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