The shadow price
A) indicates the amount by which throughput will increase for one unit of unconstrained resource.
B) is the price paid on the black market for one unit of scarce resource.
C) is the price paid at night for a scarce resource.
D) indicates the amount by which contribution margin will increase for one unit of scarce resource.

Question

Quizplus · Accepted Answer

The shadow price represents the increase in the contribution margin for each additional unit of a scarce resource, reflecting its value in the context of constraints.

The Shadow Price