The marginal rate of technical substitution is:

Question

Quizplus · Accepted Answer

The marginal rate of technical substitution (MRTS) is the rate at which one input can be substituted for another input while holding the same level of output. It measures the rate at which a firm can technically substitute one input for another without changing the level of output. Mathematically, it is equal to the ratio of the marginal product of one input to the marginal product of the other input. Therefore, it can be calculated as the negative slope of an isoquant (the curve that shows all of the combinations of inputs that can be used to produce a given level of output). So, option C, "minus one times the ratio of marginal products for each input," is the correct answer.

The Marginal Rate of Technical Substitution Is