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

  1. The shadow price of a non-binding constraint is zero.
  2. The shadow price of a binding constraint is zero.
  3. If the amount of a resource used is = the amount available, then that resource capacity is a binding constraint
  4. If the amount of a resource used = the capacity of that resource available, then the shadow price of the resource will be > zero.

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