In Business / College | 2025-08-20

The owner of a car wash is using the chart below to decide whether or not to hire one additional worker. What do you think the owner's rational decision will be when considering marginal costs and benefits?

\begin{tabular}{|c|c|c|}\hline Number of car washes & Revenue earned per car wash & Marginal Revenue \\ \hline 50 & $5 & $250 \\ \hline Hours worked & Pay per hour & Marginal Cost \\ \hline 30 & $9 & $270 \\ \hline\end{tabular}

A. The owner will make a rational decision by hiring the worker because the marginal costs of $270 per week are greater than the marginal benefits of $250 per week.
B. The owner will make a rational decision by not hiring the worker because the marginal costs of $270 per week are greater than the marginal benefits of $250 per week.
C. The owner will make a rational decision by hiring the worker because the marginal costs of $270 per week will be offset by the benefit of doing more car washes each week.
D. We do not know enough information to determine whether or not the decision is rational.

Asked by alececkerman