Shadow price

SHADOW PRICE
Price that shows the social value of a good or a service (see also accounting price, economic price) and is the opportunity cost of any resource allocation.
Editor: Carmen NOTARO
© 2010 ASSONEBB ...

Shadow prices
Definition: estimated prices in situations where market prices do not exist.
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Shadow price
The true economic PRICE of an activity: the OPPORTUNITY COST. Shadow prices can be calculated for those goods and SERVICES that do not have a market price, perhaps because they are set by GOVERNMENT.

Shadow price is an opportunity cost. It is the highest valued benefit forgone when an action is taken within the structure of linear programming.

Sethi model
Shadow price
Shapley-Folkman lemma
Social Choice and Individual Values
St. Petersburg paradox ...

Dictionary Term
shadow price
Viewpoints
Staying in the Dark about Derivatives Will Bring Economic Collapse
by Hernando de Soto ...

The shadow price of foreign exchange.
2. What the market exchange rate would be in the absence of various market imperfections.
Shadow price
The implicit value or cost associated with a constraint.

See also: Values, Constraint, Linear programming, Optimal, Forward exchange