Post Utme Esut 2020 Commerce Question 40

Practice objective / multiple choice question 40 from the 2020 Post Utme Esut Commerce examination.

Post Utme Esut 2020 Commerce Objective / Multiple Choice
Question 40 POST_UTME_ESUT • 2020 • COMMERCE • objective

A sole trader is considering whether to expand its business by hiring more employees. The sole trader's current profit is ₦100,000 per year, and the cost of hiring one additional employee is ₦50,000 per year. If the sole trader expects to increase its profit by ₦20,000 per year for each additional employee hired, should the sole trader expand its business?

Answer Options

Correct Answer A. Yes, because the expected increase in profit is greater than the cost of hiring an additional employee.
B. No, because the cost of hiring an additional employee is greater than the expected increase in profit.
C. Yes, because the sole trader's current profit is high enough to justify the cost of hiring an additional employee.
D. No, because the sole trader's current profit is too low to justify the cost of hiring an additional employee.
Correct Answer
A
Correct Option:
Yes, because the expected increase in profit is greater than the cost of hiring an additional employee.

About This Question

This is Post Utme Esut 2020 Commerce Question 40. It is one of the objective questions from the 2020 Post Utme Esut Commerce examination.

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