The rate at which one input can be reduced per additional unit of the other input, while holding output constant, is measured by the:
A) marginal rate of substitution.
B) marginal rate of technical substitution.
C) slope of the isocost curve.
D) average product of the input.

Question

Quizplus · Accepted Answer

The marginal rate of technical substitution (MRTS) measures the rate at which one input can be reduced per additional unit of the other input, while holding output constant. It is typically represented by the slope of an isoquant, which shows all possible combinations of inputs that produce a given level of output.

The Rate at Which One Input Can Be Reduced Per