Shadow Pricing

Discipline: Economics

Use of linear programming techniques in situations in which a price cannot be charged or where the price does not reflect the effort made in producing the good.

In general this policy attempts to achieve an optimum allocation of resources in the absence of an effective price system.

Also see: cost-benefit analysis, opportunity cost

Source:
I M D Little and M F D Scott, eds, Using Shadow Prices (London, 1976)

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