Using the following problem and optimal solution, compute for shadow price. A firm produces two products, A and B. Product A requires two hours of grinding and four hours of polishing. Product B requires five hours of grinding and two hours of polishing. The manufacturer has 3 grinders and 2 polishers; therefore, in a 40-hour week there are 120 hours of grinding capacity and 80 hours of polishing capacity. There is a ready market for both products and the contribution margin per unit of Product A and Product B are P3 and P4, respectively.

Objective Function:

Maximize : Total CM = P3A + P4B

Constraints: 2A + 5B 120 4A + 2B 80 A, B 0

Optimal Solution: 10A & 20B CM = 110 (P3(10) + P4(20)

Required: Compute for Shadow Price