​The Main Difference Between Shadow Prices and Lagrange Multipliers Involves

question 16

True/False

​The main difference between shadow prices and Lagrange multipliers involves the range of RHS values over which the shadow price or Lagrange multiplier remains valid

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Definitions:

Artificially Scarce

A situation where the supply of a good is limited by factors other than its physical scarcity, often due to regulatory or monopolistic practices.

Excludable

Referring to a good, describes the case in which the supplier can prevent those who do not pay from consuming the good.

Nonrival

A property of a good or service where its consumption by one individual does not reduce availability for others, often found in public goods.

Private Good

A good that is both excludable and rivalrous, meaning it can only be used by one person at a time, and access to it can be restricted.