The Shadow Price in a Linear Programming Model Is

question 85

Multiple Choice

The shadow price in a linear programming model is:

• A) Interesting from a mathematical or economic theory standpoint, but not generally useful from an accounting standpoint.
• B) Equal to the current market price for an additional unit of the related resource.
• C) The maximum price a rational decision-maker would be willing to pay for an additional unit of the scarce resource.
• D) Greater than the market price for the related resource.
• E) Zero for a binding constraint.

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Definitions:

Molecular Formula

A notation that shows the number and type of atoms in a molecule, indicating the composition but not the structure of the molecule.

Hydrogen Atom

The simplest type of atom, consisting of one proton in the nucleus and one electron in orbit around it.

Oxygen Atom

A highly reactive element that is a key component of water and essential for cellular respiration in living organisms.

Osmolality

The concentration of solutes per kilogram of solvent in a solution, important in regulating water balance and solute concentration in the body.