A firm will find it profitable to hire workers up to the point at which their?


The hiring range is a term used to describe the point at which it becomes more profitable for an employer to hire another worker. As you can imagine, there are many variables that go into calculating this number.

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For example, if workers are paid hourly and each worker costs $15 per hour, then the cost of employee-related expenses will be $150 per day($150×24=3600).

This means that if a firm hires five workers, they will have incurred $750 in total employment-related expenses for the day(750×360=$262K).

The hiring range varies based on these numbers:

The wage rate of employees and how much time they spend doing work; whether or not one needs to pay benefits like health insurance and retirement funds; whether or not there is an overhead expense associated with running the business.


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