Teaching production theory through simulation

Figures & data

Figure 1. Screenshot of the profit maximization with no market simulation.

Table 1. Profit maximization with no market power (simulation ID: 51).

Period	U	S	R	Profit	Price=$38	$w_u$=120	$w_s$=149	$w_r$=194
					Change in profit	$\mathit{\text{VMPu}}$	$\mathit{\text{VMPs}}$	$\mathit{\text{VMPr}}$
1	470.5	751.5	136.5	$50,401.87
2	471.5	751.5	136.5	$50,468.23	$66.36	186.36
3	471.5	752.5	136.5	$50,434.94	−$33.29		115.71
4	471.5	752.5	137.5	$50,354.25	−$80.68			113.32
5	542	700	117	$57,160.98	$6,806.73
6	543	700	117	$57,205.33	$44.35	164.28
7	543	701	117	$57,182.50	−$22.83		126.20
8	543	701	118	$57,122.71	−$59.79			134.35
9	678	595	82	$63,282.48	$6,159.77
10	679	595	82	$63,293.88	$11.40	131.40
11	679	594	82	$63,294.31	$0.43		148.57
12	679	594	81	$63,295.17	$0.87			193.13
13	725	594	81	$63,681.85	$386.67	128.41
14	726	594	81	$63,687.54	$5.69	125.69
15	726	595	81	$63,690.59	$3.05		152.05
16	726	595	82	$63,694.52	$3.93			197.93
17	776	636	87	$64,024.29	$329.76
18	792	649	89	$64,088.64	$64.36
19	793	649	89	$64,091.92	$3.28	123.28
20	793	650	89	$64,092.02	$0.10		149.10
21	793	650	90	$64,091.10	−$0.92			193.08
22	825	657	90	$64,161.41	$70.31
23	826	657	90	$64,162.11	$0.70	120.70
24	826	658	90	$64,163.31	$1.20		150.20
25	826	658	90.1	$64,163.47	$0.16			195.64
26	834	671	92	$64,178.61	$15.14
27	835	671	92	$64,179.53	$0.93	120.93
28	835	672	92	$64,179.49	−$0.04		148.96
29	835	672	93	$64,178.44	−$1.05			192.95
30	842	672	91	$64,182.32	$3.87

Note: The rows in boldface are periods where we make significant changes in the input mix and dramatically improve profits. The direction and magnitude of these changes are suggested by information on the VMPs gathered in the most recent periods before each of the changes.

Figure 2. Screenshot of isoquant curve in the profit-maximization visualization.

Figure 3. Screenshot of isocost curve in the profit-maximization visualization.

Figure 4. Screenshot of optimization tab in the profit-maximization visualization.

Figure 5. Screenshot of isoquant curve in the cost minimization visualization.

Figure 6. Screenshot of isocost curve in the cost minimization visualization.

Figure 7. Screenshot of optimization tab in the cost minimization visualization.

Figure 8. Screenshot of the isoquant tab in the production function visualization.