The implicit value or cost associated with a constraint. That is, the increased value that will be achieved by relaxing the constraint by one unit. When foreign exchange is rationed, the shadow price of foreign exchange becomes the relevant exchange rate for making decisions.
Related information about shadow price:
- Shadow price - Wikipedia, the free encyclopedia
In constrained optimization in economics, the shadow price is the instantaneous change per unit of the constraint in the objective value of the optimal solution of ...
- What is a Shadow Price?
Oct 9, 2012 ... A shadow price is a measure of the extra value that would come from increasing a production resource by one unit. This price is...
- Linear Programming
The shadow price is the amount that the objective function value would ... The shadow price is valid up to the allowable increase or decrease in the constraint.
- Shadow Price - Dictionary Definition of Shadow Price
Definition: In the context of a maximization problem with a constraint, the shadow price on the constrain is the amount that the objective function of the ...
- What is shadow price? definition and meaning
Definition of shadow price: Opportunity cost of an activity or project to a society, computed where the actual price is not known or, if known, does not reflect the ...
- Shadow Pricing Definition & Example | InvestingAnswers
By assigning a shadow price to an intangible asset, analysts can get a clear sense of how the costs of a project or investment affects the current circumstances ...
- shadow price in linear programming - Mathematics
Dec 14, 2011 ... I am quite confuse with the explaination of Shadow Price found from Internet. It can be understood as: the value of an addition revenue if the ...
- Market Price, Shadow Price and All That - JStor
the concept of 'shadow price' still lingers on in cost-benefit analyses. In this paper it is argued that shadow prices as computed from linear programming models ...