Enter the value of objective function with one more unit ($) and the value of original objective function ($) into the Shadow Price Calculator. The calculator will evaluate and display the Shadow Price. 

Shadow Price Formula

The following formula is used to calculate the Shadow Price. 

SP = V(f+1) – V(f)

  • Where SP is the Shadow Price ($)
  • Vf(+1) is the value of objective function with one more unit ($) 
  • V(f) is the value of original objective function ($) 

How to Calculate Shadow Price?

The following example problems outline how to calculate Shadow Price.

Example Problem #1:

  1. First, determine the value of objective function with one more unit ($). 
    1. The value of objective function with one more unit ($) is given as: 450.
  2. Next, determine the value of original objective function ($). 
    1. The value of original objective function ($) is provided as: 50.
  3. Finally, calculate the Shadow Price using the equation above: 

SP = V(f+1) – V(f)

The values given above are inserted into the equation below:

SP = 450 – 50 = 400.00 ($)


Example Problem #2: 

For this problem, the variables needed are provided below:

value of objective function with one more unit ($) = 3020

value of original objective function ($) = 93

This example problem is a test of your knowledge on the subject. Use the calculator above to check your answer. 

SP = V(f+1) – V(f) = ?