Suppose That the Shadow Price for Assembly Time Is $5/hour

question 26

Multiple Choice

Suppose that the shadow price for assembly time is $5/hour. If all assembly hours were used under the initial LP solution and workers normally make $4/hour but can work overtime for $6/hour, what should management do?

• A) do not change available hours for assembly time
• B) decrease available hours for assembly time
• C) increase available hours for assembly time
• D) not enough information
• E) Either A or C will result in larger profits than B.

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