In Sensitivity Analysis, a Zero Shadow Price (Or Dual Value)

question 8

Multiple Choice

In sensitivity analysis, a zero shadow price (or dual value) for a resource ordinarily means that

• A) the resource is scarce
• B) the resource constraint was redundant
• C) the resource has not been used up
• D) something is wrong with the problem formulation
• E) none of the above

Understand the distinction between different types of costs (fixed, variable, mixed) and their characteristics.

Comprehend how costs behave with changes in the level of activity (relevant range, variable costs per unit, and fixed costs per period).

Calculate contribution margin and gross margin, and understand their relevance in decision-making.

Apply cost-volume-profit analysis to make informed decisions.

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