Solution

ID: past-exam-of-the-probability-statistics-and-options-ii-course-of-the-university-of-oxford/2007/t/2/c/iii/solution

Changing only the second profit coefficient leaves the dual prices at , because the basic products remain one and three. The nonbasic product has nonpositive reduced cost exactly when . Therefore
There is no mathematical lower bound; if profit coefficients are additionally restricted to be nonnegative, intersect this range with . At , alternate optimal solutions are possible.

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