Shadow prices are associated with nonbinding constraints,and show the change in the optimal objective function value when the right side of the constraint equation changes by one unit.

Question

Quizplus · Accepted Answer

Shadow prices are associated with binding constraints, not nonbinding constraints, and they show the change in the optimal objective value for a one-unit increase in the right-hand side of the constraint equation.

Shadow Prices Are Associated with Nonbinding Constraints,and Show the Change