Answer to Question #324283 in Microeconomics for Gigi

Question

There is no difference between the marginal rate of substitution and the marginal rate of transformation.

Do you agree with this statement? Elaborate on your answer.

Answer 1

While the marginal rate of transformation (MRT) is similar to the marginal rate of substitution (MRS), these two concepts are not the same. The marginal rate of substitution focuses on demand, while MRT focuses on supply.