MRS in Economics: What It Is and the Formula for Calculating It
MRS in Economics: What It Is and the Formula for Calculating It
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Marginal Rate of Substitution | MRS Definition, Formula & Example
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Marginal Rate of Substitution (MRS) ************************** The marginal rate of substitution is the rate at which one commodity can be substituted for another without affecting total satisfaction. The MRS is given by the slope of the Indifference curve. To explain the concept of MRS, let us suppose that a consumer consumes only two goods X and Y. The utility function of the consumer is given as: U = ⨏(X,Y) Where X and Y are substitutes Let us assume that the consumer substitutes X for Y such
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