The Shadow Price of a Nonbinding Constraint Is

question 40

Multiple Choice

The shadow price of a nonbinding constraint is:

• A) negative in value
• B) zero.
• C) a value between zero and one.
• D) proportionate to the amount of profit
• E) equal to the profit per unit of the decision variable concerned.

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Definitions:

Delegatee

A person to whom duties, responsibilities, or authority is transferred from another, the delegator.

Delegator

A person or entity that assigns tasks or authority to others to carry out specific duties.

Obligee

The party in a contractual agreement who is owed a performance or payment by another party (the obligor).

Assignee

An individual or entity to whom rights or interests are transferred by another, known as the assignor.