Question: The shadow price in a linear programming model is: Multiple Choice Zero for a binding constraint. Greater than the market price for the related resource.

The shadow price in a linear programming model is:

Multiple Choice

  • Zero for a binding constraint.

  • Greater than the market price for the related resource.

  • Interesting from a mathematical or economic theory standpoint, but not generally useful from an accounting standpoint.

  • Equal to the current market price for an additional unit of the related resource.

  • The maximum price a rational decision-maker would be willing to pay for an additional unit of the scarce resource.

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