Variable Cells Constraints Which Parameter Is Most Sensitive to an Increase in Its

question 31

Multiple Choice

Variable cells
$$\begin{array} { | r | r | r | r | r | r | r | } \hline \text { Cell } & \text { Name } & \begin{array} { c } \text { Final } \\\text { Value }\end{array} & \begin{array} { c } \text { Reduced } \\\text { Cost }\end{array} & \begin{array} { c } \text { Objective } \\\text { Codficient }\end{array} & \begin{array} { c } \text { Allowable } \\\text { Increase }\end{array} & \begin{array} { c } \text { Allowuble } \\\text { Decrease }\end{array} \\\hline \text { \$B\$6 } & \text { Activity 1 } & 3 & 0 & 30 & 23 & 17 \\\hline \text { \$C\$6 } & \text { Activity 2 } & 6 & 0 & 40 & 50 & 10 \\\hline \text { \$D\$6 } & \text { Activity 3 } & 0 & - 7 & 20 & 7 & 1 \mathrm { E } + 30 \\\hline\end{array}$$
Constraints
$\begin{array}{|r|r|r|r|r|r|r|}\hline \text { Cell } & \text { Name } & \begin{array}{c}\text { Final } \\\text { Value }\end{array} & \begin{array}{c}\text { Shadow } \\\text { Price }\end{array} & \begin{array}{c}\text { Constraint } \\\text { R.H. Side }\end{array} & {\begin{array}{c}\text { Allowable } \\\text { Increase }\end{array}} & \begin{array}{c}\text { Allowable } \\\text { Decrease }\end{array} \\\hline \$ \mathrm{E} \$ 2 & \text { Resource A } & 20 & 7.78 & 20 & 10 & 12.5 \\\hline \$ \mathrm{E} \$ 3 & \text { Resource B } & 30 & 6 & 30 & 50 & 10 \\\hline \$ \mathrm{E} \$ 4 & \text { Resource C } & 18 & \mathrm{0} & 40 & 1 \mathrm{E}+30 & 22\\\hline\end{array}$
Which parameter is most sensitive to an increase in its value?

• A) The objective coefficient of Activity 1.
• B) The objective coefficient of Activity 2.
• C) The objective coefficient of Activity 3.
• D) All of the choices are correct.
• E) None of the choices is correct.

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Definitions:

Midpoint Method

A technique used in economics to calculate the percentage change in quantity demanded or supplied between two points on a curve, providing an average elasticity for that range.

Cross-Price Elasticity of Demand

A measurement of how the quantity demanded of one good responds to a change in the price of another good, indicating whether they are substitutes or complements.

Cross-Price Elasticity

A measure in economics that shows how the quantity demanded of one good responds to a change in the price of another good.

Cross-Price Elasticity of Demand

An indicator of how the demand for one product shifts following a change in the cost of a separate product.