A shadow price reflects which of the following in a maximization problem?
A) marginal cost of adding additional resources
B) marginal gain in the objective that would be realized by adding one unit of a resource
C) net gain in the objective that would be realized by adding one unit of a resource
D) marginal gain in the objective that would be realized by subtracting one unit of a resource
E) expected value of perfect information

Question

Quizplus · Accepted Answer

A shadow price reflects the marginal gain in the objective that would be realized by adding one unit of a resource. It represents the amount by which the objective function would increase if an additional unit of a resource were made available. Therefore, option B is the correct answer.

A Shadow Price Reflects Which of the Following in a Maximization