You have been hired by a data processing firm to provide economic advice. The owner of the firm tells you that the firm's only variable input is the number of data-entry operators. The hourly wage for data-entry operators is $15.00. The marginal revenue product curve for data-entry operators reaches its maximum at three workers with a marginal revenue product of $12.00. What advice would you give this firm?
◦ Hire three data-entry operators so as to minimize the amount of money the firm will lose.
◦ Shut down immediately, as the firm is not able to cover all of its variable costs.
◦ Increase the wage rate paid to data-entry operators so that their marginal revenue product will increase.
◦ Produce as much as possible so as to maximize the difference between the wage paid to data-entry operators and their marginal revenue product.
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The processing of ribosomal and transfer RNA