Question

Why should marginal rate of substitution diminish for a stable consumer's equilibrium?

Answer 1

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It means that the indifference curve must be convex to the origin at the equilibrium point.Thus for equilibrium to be stable at any point on an indifference curve, the marginal rate of substitution between any two goods must be diminishing and be equal to their price ratio i.e.

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Answer 2

Explanation:

It means that the indifference curve must be convex to the origin at the equilibrium point. ... Thus for equilibrium to be stable at any point on an indifference curve, the marginal rate of substitution between any two goods must be diminishing and be equal to their price ratio i.e.