Assume That the Shadow Price of a Non-Binding "≤" Constraint

question 23

Multiple Choice

Assume that the shadow price of a non-binding "≤" constraint is 5.This implies that:

• A)if the right-hand side value of the constraint increases by 1 unit,the objective function value will increase by 5 units
• B)if the right-hand side value of the constraint increases by 1 unit,the objective function value will decrease by 5 units
• C)if the right-hand side value of the constraint increases by 1 unit,the objective function value will remain unchanged
• D)if the right-hand side value of the constraint decreases by 1 unit,the objective function value will increase by 5 units
• E)if the objective function coefficient increases by 1 unit,the shadow price will increase by 5 units

Understand the concepts of quantity effect and price effect on firm profits resulting from changes in produced quantities.

Analyze the effect of additional production on market price and individual firm's profits in the context of marginal costs.

Describe how perfectly competitive market outcomes differ from those in oligopolistic markets with collusion.

Understand methods and limitations of retrospective suicide analysis.

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Definitions:

Conversion Symptoms

Physical symptoms that occur without a physiological basis, often resulting from psychological conflict or stress.

Conversion Disorder

A mental condition in which a person has blindness, paralysis, or other nervous system symptoms that cannot be explained by medical evaluation.

Spontaneous Self-hypnosis

The natural occurrence of hypnotic-like states without formal induction, often triggered by extreme focus or stress.

Malingering

The act of intentionally feigning illness or incapacity in order to avoid work or responsibility or to gain some form of benefit.