The price associated with a resource that indicates how much more profit would be earned by increasing the amount of the resource by one unit is called ______.
A)final cost
B)reduced cost
C)shadow price
D)single price

Question

Quizplus · Accepted Answer

The price associated with a resource that indicates how much more profit would be earned by increasing the amount of the resource by one unit is called shadow price. Option A, final cost, is the total cost of producing a given quantity of output. Option B, reduced cost, refers to the amount by which the objective function coefficient must be reduced for a variable to enter the basis of a linear programming problem. Option D, single price, is not a term used in linear programming.

The Price Associated with a Resource That Indicates How Much