Allison is debating about hiring Jim for a new position at her firm producing computer software. She estimates that Jim will add an additional $500 of revenue a day to her firm. Instructions: Enter your answers as a whole number. a. What is the maximum wage at which Allison would be willing to hire Jim?

Since Jim's appearance at the firm is estimated to create an additional revenue of $500 per day, for the firm to be profitable from hiring Jim to work for them, the additional cost incurred from hiring him - that is his salary, should not exceed $500 per a day.

Thus, the maximum wage the computer software company is willing to pay Jim is $500 per a day.

nikitavidya0 nikitavidya0 · Answer 2 · 2022-03-23T07:04:11+01:00

The maximum wage implies the ceiling above which the company would not hire the candidate at the given position.

What is the maximum wage at which Allison would be willing to hire Jim?

The wages are set by understanding the demand and supply of the laborers in the market. The company also considers its production cost and revenue that an employee is expected to incur.

Therefore, Allison has estimated an increase of $500 in her revenue from hiring Jim. It suggests that the cost of hiring should not exceed the revenue derived from it, which would make the wage of Jim either below or the same as $500.

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