Druk IncIs a Consulting Firm with 10 Employees

question 15

Multiple Choice

Druk Inc.is a consulting firm with 10 employees.Each new client generates $10,000 in revenue.If the company hires another employee who brings in five new clients and all other factors of production are constant, which of the following statements is true?

• A)Druk will break even if it hires a twelfth employee for a wage of $50,000.
• B)Druk needs to pay $10,000 as wage to the eleventh employee to break even.
• C)Druk will break even if it hires a thirteenth employee for a wage of $10,000.
• D)Druk needs to pay $50,000 as wage to the eleventh employee to break even.

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