A Linear Programming Maximization Problem Has Been Solved

question 23

Multiple Choice

A linear programming maximization problem has been solved. In the optimal solution, two resources are scarce. If an added amount could be found for only one of these resources, how would the optimal solution be changed?

• A) The shadow price of the added resource will rise.
• B) The solution stays the same; the extra resource can't be used without more of the other scarce resource.
• C) The extra resource will cause the value of the objective to fall.
• D) The optimal mix will be rearranged to use the added resource, and the value of the objective function will rise.
• E) The extra resource will cause the value of the objective to rise.

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Definitions:

Variable Costs

Expenses that fluctuate in direct proportion to the volume of production or amount of output.

Fixed Costs

Expenses that do not change in total regardless of the level of production or sales activity, such as rent or salaries.

Variable Costs

Costs that vary directly with the level of production or sales volume.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.