Question

what do you understand by rising MRS,in which situation is the MRS rising​

Answer 1

Explanation:

In economics, the marginal rate of substitution (MRS) is the amount of a good that a consumer is willing to give up for another good, as long as the new good is equally satisfying. It's used in indifference theory to analyze consumer behavior. The marginal rate of substitution is calculated between two goods placed on an indifference curve, displaying a frontier of equal utility for each combination of "good A" and "good B."The Formula for MRS Is

\begin{aligned} &|MRS_{xy}| = \frac{dy}{dx} = \frac{MU_x}{MU_y} \\ &\textbf{where:}\\ &x, y=\text{two different goods}\\ &\frac{dy}{dx}=\text{derivative of y with respect to x}\\ &MU=\text{marginal utility of good x, y}\\ \end{aligned}

∣MRS

xy

∣=

dx

dy

=

MU

y

MU

x

where:

x,y=two different goods

dx

dy

=derivative of y with respect to x

MU=marginal utility of good x, y

Answer 2

Answer:

MRS is a rate at which consumer is willing to sacrifice a commodity for additional unit of the other.

Explanation:

Because of law of diminishing MU , MRS is always declining