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What is Marginal Rate of Substitution?
In Microeconomics if a consumer gave up one good and adopted any other good on the same rate, then it is known as Marginal rate of substitution. This is applicable in indifference theory and gets the exact behavior of the consumer. This can be shown in the graph of Indifference curve, where two different goods and MRS is required to calculate. Here, the similar utility is applicable for each combination of both the goods.
In other word when it comes to the position of the marginal rate of utility, a consumer will always think of her best profit. It means, there is no any significance of a marginal utility or so much worse or better a combination of goods would be for a consumer as compared to some other combination.
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