Economy, asked by cool2437, 2 months ago

why MRS equals to price ratio?

Answers

Answered by deepakojha11411
2

Answer:

At the point of tangency, the marginal rate of substitution (MRS) between the two goods is equal to the ratio of prices of the two goods. This means that the rate at which the consumer is willing to exchange one good for another equals the rate at which the goods can be exchanged in the market

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