Important Notice: Our web hosting provider recently started charging us for additional visits, which was unexpected. In response, we're seeking donations. Depending on the situation, we may explore different monetization options for our Community and Expert Contributors. It's crucial to provide more returns for their expertise and offer more Expert Validated Answers or AI Validated Answers. Learn more about our hosting issue here.

When are reduced costs zero, positive, or negative?

0
Posted

When are reduced costs zero, positive, or negative?

0

Reduced costs are zero when upper or lower limits including nonnegativity constraints are not binding. If you maximize profit, reduced costs are positive when you would like to produce more of a product but you cannot, because the production is already at the upper bound. Conversely, reduced costs are negative when you have to produce a product even though you would not like because of lower limits on production.

Related Questions

What is your question?

*Sadly, we had to bring back ads too. Hopefully more targeted.

Experts123