Question

In sensitivity analysis, a zero shadow price (or dual value) for a resource ordinarily means that the resource has not been used up.

a) True

b) False

Answer 1

A zero shadow price in sensitivity analysis indicates that the resource has not been used up.

Step-by-step explanation:

In sensitivity analysis, a zero shadow price (or dual value) for a resource ordinarily means that the resource has not been used up.

This statement is True.

Shadow price or dual value in sensitivity analysis represents the marginal value of a resource. When the shadow price is zero, it indicates that the resource is not a binding constraint and has not been fully utilized.