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Consider a firm that has five employees and the firm is deciding whether to employ more laborers.The total product produced from the five employees is

Consider a firm that has five employees and the firm is deciding whether to employ more laborers.The total product produced from the five employees is 26 units of good x.The firm pays a competitive wage, per laborer, of $40.The output price, per unit, is $8.Bringing in the sixth employee is projected to exhibit the total output rising to 33 units of good x.If the firm employs one more laborer, it is projected to show that the labor force of 7 employees brings the total product to 37.What should the firm do to maximize its profits?

(a)The firm should keep the labor force of 5 employees.

(b)The firm should hire the sixth employee.

(c)The firm should hire all seven employees.

(d)There is not enough information to determine what will be optimal to the firm.

(e)None of the above.

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