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I assume you are asking how to calculate the shadow price of demand.
You do it exactly the same way as the I show in my free lecture. You increase the demand by 1, see what the new optimal mix is, the shadow price is the extra contribution that results.
what i understand from explanation above is that
the shadow price of demand is equal to the maximum value that i can pay for obtaining one more unit of the binding constraintcould u illustrate me with one example since in the lectures it doesnt says anything
Suppose the maximum demand is 10 units, and this is a limiting constraint.
In the normal way you calculate how many units of each at the optimum mix, and the total contribution.Then you repeat the exercise as though the maximum demand were 11 units.
The extra contribution that results in the shadow price.
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