Interactive simulator
Production Function and Diminishing Returns Simulator
In the short run, capital is fixed and labor is variable. This simulator traces total product as you add workers to a fixed-size plant, then derives marginal product (the extra output of the last worker) and average product. You will see marginal product rise at first, then decline — the law of diminishing marginal returns — and eventually turn negative when workers get in each other's way. In this release this page is powered by the closest available interactive widget; a dedicated widget for this topic is planned.
Equilibrium solves Qd = Qs, so P* = (a − c) ÷ (b + d). Shifting demand changes a; shifting supply changes c. A ceiling only bites when set below P* (creating a shortage); a floor only bites when set above P* (creating a surplus).
How to use it
Add workers one at a time with the slider.
Watch total product rise, then flatten, then possibly fall.
Track marginal product and find where it starts diminishing.
Find the point where marginal product crosses average product.
What you will learn
- State the law of diminishing marginal returns.
- Distinguish total, average, and marginal product.
- Explain why marginal product eventually falls.
Model notes
The production technology is illustrative, not estimated from any firm. Capital is fixed, labor quality is identical, and there is no technological change — simplifications that let the mechanics of diminishing returns stand out.