V. Resource Valuation 



Marginal Value Products 



In linear programming solutions each limiting resource is as- 

 signed "opportunity cost" or "shadow price" equal to its value in its 

 most profitable use. These shadow prices of limited resources are the 

 marginal-value products of the resources, i.e., the change in net 

 income attributable to the last unit of the resource employed. An 

 increase in the supply of one resource relative to a resource for which 

 it can substitute decreases the marginal value of the first resource 

 and increases marginal value of the second resource. In table 7 it 

 can be seen that increasing the cows kept on a fixed acreage rapidly 

 decreases the marginal-value product of cows and rapidly increases 

 the marginal-value product of cropland. The marginal-value product 



Table 7. Marginal value products for selected resources with medium quality 

 cows, $5.00 price of milk, various ratios of cows to cropland and 

 with and without sales of hay. 



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