A Shadow Price Reflects Which of the Following in a Maximization

question 38

Multiple Choice

A shadow price reflects which of the following in a maximization problem?

• A)marginal cost of adding additional resources
• B)marginal gain in the objective that would be realized by adding one unit of a resource
• C)net gain in the objective that would be realized by increasing an objective function coefficient
• D)marginal gain in the objective that would be realized by subtracting one unit of a resource
• E)expected value of perfect information

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Definitions:

Sales/FOB Terms

Terms used in international trade to define when and where the responsibility and ownership of goods are transferred from the seller to the buyer; "FOB" stands for Free On Board.

Commodities

Basic goods used in commerce that are interchangeable with other goods of the same type, typically used as inputs in the production of other goods or services.

Distinctives

Unique characteristics or features that differentiate a product, service, or organization from its competitors.

High Risk

A situation or investment that carries a significant chance of loss or failure.