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.

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) = ?