What is the marginal rate of substitution?
A)the price ratio
B)the rate at which the consumer must give up one good to purchase an additional unit of the other goods in the market
C)the rate at which the consumer is willing to trade one good for another so that she increases her utility
D)the rate at which the consumer is willing to trade one good for another without any loss in utility

Question

Quizplus · Accepted Answer

The marginal rate of substitution (MRS) is the rate at which a consumer is willing to trade one good for another while maintaining the same level of utility, meaning there is no loss in utility.

What Is the Marginal Rate of Substitution