What is a shadow price, and what does it represent in Linear Programming?
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In Linear Programming, a shadow price represents the marginal value or opportunity cost of a constrained resource, indicating the change in the objective function's value resulting from a one-unit increase in the resource's availability.
A shadow price is the value assigned to a constraint in linear programming, representing the increase in the objective function's value for a one-unit increase in the right-hand side of that constraint. It indicates how much the optimal solution would improve if additional resources were made available. Shadow prices are particularly relevant for binding constraints, as they reflect the marginal worth of relaxing those constraints.