Question: Consider an optimization model with a number of resource constraints. Each indicates that the amount of the resource used cannot exceed the amount available. Why
Consider an optimization model with a number of resource constraints. Each indicates that the amount of the resource used cannot exceed the amount available. Why is the shadow price of such a resource constraint always zero when the amount used in the optimal solution is less than the amount available?
Group of answer choices
- The shadow price of a non-binding constraint is zero.
- The shadow price of a binding constraint is zero.
- If the amount of a resource used is = the amount available, then that resource capacity is a binding constraint
- If the amount of a resource used = the capacity of that resource available, then the shadow price of the resource will be > zero.
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
