The Farm Profit Lab
Run a 1.5-acre market garden as a price taker. Choose beds of tomatoes, carrots, and mesclun; diminishing returns make every extra bed more labor-hungry, so marginal cost rises — and the profit-maximizing plan is where price meets marginal cost. This is the Perfect Competition case study's Excel model, made touchable.
Planting plan
Predict first: which crop deserves the most beds, and where should each one stop? Then check yourself against the optimizer — and make it explain itself via the marginal analysis below.
Season P&L
Marginal analysis
Marginal cost vs price
Things to try
- Slide tomatoes up one bed at a time and watch the marginal analysis: the moment "+1 bed of Tomatoes" turns negative, you've crossed P = MC. Check the chart agrees.
- Watch the tomato MC curve bed by bed. Does it ever fall? If it does, find the bed where it happens and ask what changed: the physical returns, or the cost of the next hour of labor?
- Push each crop to its cap. Which crops would still add profit with one more bed if the cap allowed it? A cap that stops you there is a binding constraint, and the profit it forgoes is its shadow price.
- Grow only carrots. Does any all-carrot plan make money once the fixed cost is charged? Compare the best one with planting nothing. Which comparison decides it: price against marginal cost, average variable cost, or average total cost?
- Interrogate Kumu (✳) — have it quiz you on why the optimum is where it is before you press the button.
From lab to project
The course workbook (farm-profit-optimizer-template.xlsx) is this exact model with
named ranges and Excel Solver. If you can predict what this lab will do, you can build, solve,
and — most importantly — explain the spreadsheet version.