Question

what is the marginal rate of substitution? explain with the hypothetical table​

Answer 1

Answer:

The assumption of diminishing marginal rate of substitution states that the consumer will be willing to sacrifice lesser units of Good Y, so as to gain additional unit of the Good X. This is an extention of law of diminishing marginal utility. Diminishingmarginal rate of substitution is the reason behind convexity of Indifference Curve to the origin.