Profit Maximization Example

Here is a Javascript page that shows the maximization of profits in the example. Remember, the wage is $500 per labor week. The theory tells us that profits will be biggest when the value of the marginal product is exactly equal to the wage, that is, $500. Try adjusting the number of labor weeks input and see how profits increase as the value of the marginal product gets closer to $500.

Program Example 3

Click here to see the result:

Labor Input	Marginal Physical Product	Value of Marginal Product	Wage	Profits
			500

Again, if you read JavaScript, take a look at the source of the page to see the mathematical background of this example.