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 that would be realized by adding one unit of a resource
C) The net gain in the objective that would be realized by adding one unit of a resource
D) The marginal gain in the objective that would be realized by subtracting one unit of a resource
E) None of the choices are correct.

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 change if an additional unit of a resource were made available.

A Shadow Price Reflects Which of the Following in a Maximization