You are currently paying $12 per hour for labor, and labor costs are included in the calculation of the objective function coefficients of a maximization problem.The shadow price for labor printed on the sensitivity analysis report is $8.It would be economically beneficial to you if you could secure extra labor for $15 per hour.

Question

Quizplus · Accepted Answer

The shadow price of $8 indicates that the objective function value would increase by $8 for each additional unit of labor available. Since you can secure extra labor for $15 per hour, and the shadow price is $8, it would be economically beneficial to do so.

You Are Currently Paying $12 Per Hour for Labor, and Labor