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When the owner of a sushi restaurant hires a second cook, customers increase their orders from 50 to 100 orders per week. He pays each
When the owner of a sushi restaurant hires a second cook, customers increase their orders from 50 to 100 orders per week. He pays each cook $400 per week and charges $18 per order. If he adds one more cook, he might get 20 extra orders per week. Should he hire a third cook? Why? No, he should hire only two cooks to get the maximum profit of $1000. No, he would lose $100, since the wage exceeds the marginal revenue product. Yes, he should hire another cook to maximize the profit, which is $960. Yes, his marginal revenue product exceeds the wage by $40
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