Shadow Price Calculator

Calculate Shadow Price



Formula

The formula to calculate the Shadow Price (SP) is:

\[ SP = V(f+1) - V(f) \]

Where:

What is a Shadow Price?

The Shadow Price is the change in the value of the objective function of an optimization problem when an additional unit of a resource is added. It represents the marginal value of the resource in the context of the optimization problem.

Example Calculation

Let's assume the following values:

Using the formula:

\[ SP = 1500 - 1400 = 100 \]

The Shadow Price (SP) is $100.