When two goods are perfect substitutes, the marginal rate of substitution:
A)increases as the abundance of one good increases
B)increases as the scarcity of one good increases
C)decreases as the scarcity of one good increases
D)is constant

Question

Quizplus · Accepted Answer

When two goods are perfect substitutes, the consumer is willing to substitute one good for the other at a constant rate, which means the marginal rate of substitution remains constant regardless of the abundance or scarcity of the goods.

When Two Goods Are Perfect Substitutes, the Marginal Rate of Substitution