Question 12 As we move along an indifference curve, the marginal rate of substitution decreases. This is in essence due to: limitations in the increase of production The law of diminishing marginal utility. There is actually no reason for this. limits in income
Marginal Rate of Technical Substitution
MRTS reaches a manufacturer when a part of the product is lowered to sustain the manufacturing level when the other part is extended. It is the level of the quantity that is lowered when one extra volume is used, and the output is unchanged.
Preferences and Utility Analysis
Before understanding what is preference and utility analysis, it is very important to understand the terms preference and utility separately.
Question 12
As we move along an indifference curve, the marginal rate of substitution decreases. This is in essence due to:
limitations in the increase of production
The law of diminishing
There is actually no reason for this.
limits in income
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