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:

Random Sample

A subset of individuals chosen from a larger set or population, where each individual has an equal chance of being selected.

Proportional Sample

A sampling method in statistical research where the sample size from each subgroup is proportional to the overall proportions of those subgroups in the total population.

Representative Sample

A segment of a population that accurately represents the attributes of the total population.

Random Sample

A sampling method where each member of a population has an equal chance of being included in the sample, reducing bias and increasing the generalizability of results.