The marginal rate of technical substitution is measured by
A)the slope of the isoquant.
B)the relative input prices.
C)the slope of the isocost line.
D)the ratio of the product's price to the product's cost of production.

Question

Quizplus · Accepted Answer

The marginal rate of technical substitution (MRTS) is measured by the slope of the isoquant, which shows the rate at which one input can be substituted for another while holding the level of output constant. The MRTS represents the amount by which the quantity of one input can be reduced for each additional unit of the other input, without changing the level of output.

The Marginal Rate of Technical Substitution Is Measured by