A firm currently employs four workers in a sandwich shop, and produces sandwiches at a total cost per sandwich (ATC) of $3. The sandwiches sell for $5. If the marginal cost of hiring another worker to produce sandwiches is $5.50 per sandwich, then:
A. it will cost $5.50 to make another sandwich, which can only be sold for $5.
B. the firm should not hire a fifth worker.
C. the firm will lose $0.50 per sandwich if it hires another worker.
D. All of these are true.
Answer: D
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