If your marginal rate of substitution between two goods diminishes continuously as you give up one good for the other, that means the
A) price per unit of one good declines when you buy it in larger and larger quantities.
B) two goods are perfect substitutes.
C) two goods are perfect complements.
D) two goods are neither perfect substitutes nor perfect complements.

Question

Quizplus · Accepted Answer

The diminishing marginal rate of substitution indicates that as you consume more of one good, you are willing to give up less of the other good, which is characteristic of goods that are neither perfect substitutes nor perfect complements.

If Your Marginal Rate of Substitution Between Two Goods Diminishes