Rate Of Technical Substitution Mathematics Problems And Answers Pdf

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Indifference curves and marginal rate of substitution

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Marginal Rate of Technical Substitution

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Marginal Rate of Technical Substitution

The marginal rate of technical substitution MRTS is the rate at which one input can be substituted for another input without changing the level of output. In other words, the marginal rate of technical substitution of Labor L for Capital K is the slope of an isoquant multiplied by In the above table, all the four factor combinations A, B, C and D produce the same level of units of output. They are all iso-product combinations. As we move from combination A to combination B, it is clear that 3 units of capital can be replaced by 5 units of labor.

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4 Response
  1. Juliane L.

    Homework #3 Answers. 1. (a) The marginal rate of technical substitution is the ratio of the marginal (a) First, we set up the Lagrangean for the cost minimization problem. Lagr. To make the math easier, we have substituted w = 4 and r = 1.

  2. Tara L.

    Marginal rate of technical substitution MRTS is the rate at which a firm can substitute capital with labor.

  3. Neville S.

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