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Suppose this table gives the MRP for workers for some firm. Using these data we can determine how many workers should be hired. Suppose that it costs $125 per day to hire a worker. In this case the firm should hire 2 workers because a 3rd would only add $110 in revenue per day. If workers could be hired at a cost of $65 per day then 5 should be hired. The 5th worker adds $80 to revenue and so should be hired but the 6th only adds $60 and so would not be hired at a cost of $65. |