If the Shadow Price of a Given Resource Is $100

Multiple Choice

If the shadow price of a given resource is $100 and the cost of expanding the capacity of that resource is $80 per unit, then the expansion of the capacity will:

A) earn positive profits.
B) earn zero profit, but the firm will stay in business.
C) temporarily earn negative profits.
D) not be a rational decision.
E) not affect the profit level.