A shadow price reflects which of the following in a maximization problem?
A) The marginal cost of adding additional resources.
B) The marginal gain in the objective value realized by adding one unit of a resource.
C) The marginal loss in the objective value realized by adding one unit of a resource.
D) The marginal gain in the objective value realized by subtracting one unit of a resource.
E) None of the choices is correct.

Question

Quizplus · Accepted Answer

A shadow price reflects the marginal gain in the objective value realized by adding one unit of a resource. It measures the amount by which the objective function would improve if one additional unit of a particular resource were available.

A Shadow Price Reflects Which of the Following in a Maximization