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Sir
In the example 3 concerning the shadow cost, the shadow price was 0 as it was already a slack of 5 units. But we happen to meet 10 units at the optimum point B, how much would be the shadow cost?
I got
E=11
C=6S+9E
=6S+11*9
what next?I watched the lecture.
I assume you mean the shadow price of demand.
It is impossible here to do it.
There is only going to be a shadow cost for the two constraints that cross at the optimum point, which in this question is materials and labour.If, for example, the optimum point had been point C, then this is where the demand line crosses the material line. So the shadow cost of labour would be zero.
To get the shadow cost of demand, you would calculate where E =11 and 2S + 4E = 80 and carry on as before.
(But again in this question it is not possible, and it irrelevant)
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