The rate at which a consumer is willing to substitute one good for another,while still maintaining a given level of satisfaction,is called the
A) market rate of substitution.
B) average rate of substitution.
C) marginal rate of substitution.
D) budget constraint.

Question

Quizplus · Accepted Answer

The rate at which a consumer is willing to substitute one good for another,while still maintaining a given level of satisfaction, is called Marginal Rate of Substitution (MRS). It refers to the amount of one good that a consumer will forgo purchasing in exchange for one additional unit of another good while still maintaining the same level of satisfaction.

The Rate at Which a Consumer Is Willing to Substitute