+1 vote
in Class 12 by kratos

Why is MRS always diminishing?

1 Answer

+5 votes
by kratos
 
Best answer

If the consumer wants to get additional unit of one product, he has to give up another product to be in same level of satisfaction. Here, when the consumer sacrifices lesser and lesser units of other commodity, the substitution between two goods will be decreasing and hence the MRS diminishes.

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