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 ($)
- Vf(f+1) is the value of objective function with one more unit ($)
- V(f) is the value of original objective function ($)

To calculate the shadow price, subtract the value of the original objective function from the value of the objective function with one more unit.

## How to Calculate Shadow Price?

The following example problems outline how to calculate Shadow Price.

Example Problem #1:

- First, determine the value of objective function with one more unit ($).
- The value of objective function with one more unit ($) is given as: 450.

- Next, determine the value of original objective function ($).
- The value of original objective function ($) is provided as: 50.

- 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)** = ?**