Interactive Labour Demand Simulation

Simulation Inputs

The simulation uses Q = T × K^α × L^1−α. Organize market conditions, production technology and firm choices separately, then explore how the profit-maximizing labour demand changes.

Market Forces

Input costs and output market conditions

Capital Rent (R) Labour Wage (W) Output Price (P)

Production

Production structure and productivity

Capital Share (α) Technology / Management / TFP (T)

Firm Choices

Inputs selected by the firm

Capital Input (K)

Open-ended Labour Assessment

Choose how far the firm should search for a profit-maximizing labour level. There is no fixed upper limit of 10.

Evaluate Labour up to (L) 50

Labour Demand Answer

PROFIT-MAXIMIZING LABOUR DEMAND

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L* is the labour level associated with maximum profit over the student-selected assessment range.

Maximum Profit–

Output at L*–

Marginal Product–

Marginal Revenue–

Total Revenue–

Total Cost–

Real Wage W/P–

Marginal Cost–