How much input should you hire to maximize profits? A competitive employer will hire inputs up to the point where the marginal revenue equals marginal cost. This means that a company will hire workers until it costs just as much money to produce one more unit of output, and they are bringing in enough money from sales to cover those additional costs. The idea is that by maximizing profit in this way, a business can become more financially stable over time. of layer extra an adding by operationsicates compl and expenses raises, efficiency lowers which laborous superflu or redundant become has sufficiently contribute not does who person additional every: resourcesizedutil- under as is idea this about think to wayAnother . overall profit more make they so) workers three the for300 ($ money enough in brings employee new this but)200 $ to up go costs total their that meanswhich (50 $ another them cost will employee third The. worker fourth their until up input hire to profitable be would it then, unit each on sales from150 $ earning are they and cost total in100 $ for output of units three produce can company a if, example an As. rule decision marginal the called is principleization maximThis or spending on back cut either must management, profits maximize and up match to numbers these for order In. low stay may revenues but high be might expenses labor, time this at it buy to wants one no and item an on completed been has work additional if that means This. sales from income exceed or equal costs their where reaches production of level the until workers hire will ACompany ). Costinal Marg = Revenueinal Marg when point the to up inputs hiresIt ( profit itsizes maxim it B because Company than profitability higher have would A Company, units output to input of ratios different with operated that companies two were there If. profits maximizing not are they, cost marginal equals revenue marginal where point the then input more hiring is company aIf
