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Assume we fix our protection level to, say, 80 seats. We are curious about the marginal impact on our revenues (i.e., the shadow price) of
Assume we fix our protection level to, say, 80 seats. We are curious about the marginal impact on our revenues (i.e., the shadow price) of changing the protection level from its current value. Note that revenue is a random variable; therefore anything derived from the revenue cell (including the shadow price) will be a random variable. Make a copy of your file "A8b_STUDENTID.xlsx", rename it as "A8c_STUDENTID.xlsx" and modify the new file to calculate the marginal change in revenue when the protection level changes. In particular, - What is the expected shadow price of increasing the protection level by ten seats? - What is the probability that the shadow price will be zero? Positive? Negative
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