Down on the Farm: Marginal Productivity and Profit Maximization in a Factor Market

Students participate in an interactive simulation to determine the number of workers a farm should hire to maximize profits in a perfectly competitive labor market.

Grade Level



  • Factor cost (resource cost)
  • Factor market
  • Fixed capital
  • Labor
  • Marginal factor cost (MFC)
  • Marginal physical product (MPP)
  • Marginal revenue product (MRP)
  • Output


  • Perfectly competitive
  • Physical product
  • Price
  • Profit maximization
  • Returns to scale
  • Total revenue
  • Wage

Time required

 90 minutes

hands holding carrots in a garden