According to the rule for optimal input usage, a firm should hire a person as long as her marginal revenue product is greater than her marginal cost to thecompany. It is well known that many companies have management training programs in which new trainee
According to the rule for optimal input usage, a firm should hire a person as long as her marginal revenue product is greater than her marginal cost to thecompany. It is well known that many companies have management training programs in which new trainees are paid relatively high starting salaries and arenot expected to make substantial contributions to the company until after the program is over (programs may run between 6 to 18 months). In offering suchtraining programs, is a company violating the optimality rule? Explain in detail.
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