The implicit value or cost associated with a constraint. That is, the increased value that will be achieved by relaxing the constraint by one unit. When foreign exchange is rationed, the shadow price of foreign exchange becomes the relevant exchange rate decisions.

An estimate of what the price of a good or input would be in the absence of market distortions, such as externalities or taxes. For example, the shadow price of capital is the present value of the social returns to capital (before corporate income taxes) measured in units of consumption.

(of capacity): The marginal value of one additional unit of capacity.

See cost-benefit analysis.