The Shadow Price of a Slack Variable in a Linear

question 115

Multiple Choice

The shadow price of a slack variable in a linear programming solution that maximises the total contribution margin reflects:

• A) The amount of excess capacity available for the associated constraint
• B) The increase in contribution margin that would occur if another unit of the constrained resource were available
• C) The contribution margin returned by the firm's profitable product
• D) The decrease in contribution margin that occurs if a unit of the associated product is produced

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