<p>I am trying to model the profit maximization decision of a firm that uses two types of labor, workers A and workers B. I started by drawing the marginal product and marginal cost curves (lines, for simplicity) for each type and found, that the lines for category A are almost horizontal, whilst when the number of workers of type B increases, the marginal product (which is high at the beginning) sharply goes down and the cost per worker goes up. Is there a way to combine these findings in a simple model that explains how a firm chooses the optimal mix of workers?</p>

CC BY-SA 4.0
2023-11-06T00:07:01.243Z
I'm not sure what you are asking here. It is unclear to me what should be an assumption and what a finding.
Michael Greinecker
CC BY-SA 4.0
2023-11-06T00:40:29.363Z
@Michael Greinecker: I am looking for a way to model the firm's hiring decisions. There are 2 groups of workers, which differ in their productivity and cost. What would the profit optimization strategy be?
Mikhail
<labor-economics><production-function><productivity><resource-economics><labor-cost>
Modelling the optimal mix of labour
Mikhail
# Modelling the optimal mix of labour

(Asked by: username_0 on 2023-11-05)

I am trying to model the profit maximization decision of a firm that uses two types of labor, workers A and workers B. I started by drawing the marginal product and marginal cost curves (lines, for simplicity) for each type and found, that the lines for category A are almost horizontal, whilst when the number of workers of type B increases, the marginal product (which is high at the beginning) sharply goes down and the cost per worker goes up. Is there a way to combine these findings in a simple model that explains how a firm chooses the optimal mix of workers?

**Tags:** labor-economics, production-function, productivity, resource-economics, labor-cost

> **Comments:**
> **username_1**: I'm not sure what you are asking here. It is unclear to me what should be an assumption and what a finding.  
> **username_0**: @username_1: I am looking for a way to model the firm's hiring decisions. There are 2 groups of workers, which differ in their productivity and cost. What would the profit optimization strategy be?  

---

## 0 answers

