Shadow prices—land management For Problems 35 and 36, refer to the farm co-op application in Example 2(a). Rework that linear programming problem with the indicated changes in one constraint and answer the questions. (a) If one more acre of land became available (for a total of 6001 acres), how would this change the co-op’s planting strategy and its maximum profit? (b) Repeat part (a) if 8 more acres of land were available. (c) Based on parts (a) and (b), what is the profit value of each additional acre of land? This value is called the shadow price of an acre of land.
Shadow prices—land management For Problems 35 and 36, refer to the farm co-op application in Example 2(a). Rework that linear programming problem with the indicated changes in one constraint and answer the questions. (a) If one more acre of land became available (for a total of 6001 acres), how would this change the co-op’s planting strategy and its maximum profit? (b) Repeat part (a) if 8 more acres of land were available. (c) Based on parts (a) and (b), what is the profit value of each additional acre of land? This value is called the shadow price of an acre of land.
Solution Summary: The author calculates the change in co-op's planting strategy and its maximum profit if one more acre of land is available.
Shadow prices—land management For Problems 35 and 36, refer to the farm co-op application in Example 2(a). Rework that linear programming problem with the indicated changes in one constraint and answer the questions.
(a) If one more acre of land became available (for a total of 6001 acres), how would this change the co-op’s planting strategy and its maximum profit?
(b) Repeat part (a) if 8 more acres of land were available.
(c) Based on parts (a) and (b), what is the profit value of each additional acre of land? This value is called the shadow price of an acre of land.
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