Formula to calculate marginal rate of substitution
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Marginal Rate of Substitution. The Marginal Rate of Substitution (MRS) is defined as the rate at which a consumer is ready to exchange a number of units good X for one more of good Y at the same level of utility. The Marginal Rate of Substitution is used to analyze the indifference curve.
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Marginal Rate of Substitution can be calculated by a formula
MRS = No. of Sacrificing units/no. of units gained.
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