A Variable with a Final Value Equal to Its Simple

question 17

Multiple Choice

A variable with a final value equal to its simple lower or upper bound and a reduced cost of zero indicates that

• A) an alternate optimal solution exists.
• B) an error in formulation has been made.
• C) the right hand sides should be increased.
• D) the objective function needs new coefficients.

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Definitions:

Favorite Bundle

The combination of goods or services that maximizes an individual's utility given their budget constraints.

Convex Preferences

A consumer preference pattern indicating a desire for mixed bundles of goods over extreme bundles, illustrating a preference for diversification.

Commodity Bundle

A specific collection of goods or services that is considered as a single unit for analytical purposes in microeconomics.

Convex Preferences

A characteristic of consumers' preferences indicating that they prefer mixes or combinations of goods over extreme amounts of either one, depicted by a convex shape in utility analysis.