It has been determined that, with respect to resource X, a one-unit increase in availability of X is within the range of feasibility for X and would lead to a $3.50 increase in the value of the objective function. This $3.50 value would be X's:
A) range of optimality.
B) shadow pricE.
C) range of feasibility.
D) slack.
E) surplus.

Question

Quizplus · Accepted Answer

The given scenario describes the concept of shadow price. Shadow price is the increase in the value of the objective function per unit increase in the availability of a resource. Therefore, a one-unit increase in availability of resource X would lead to a $3.50 increase in the value of the objective function, which is X's shadow price.

It Has Been Determined That, with Respect to Resource X