Consumers may be equally happy consuming different goods, though they may need to substitute more of one product in place of eac

Question

Irina18 [472]

3 years ago

9

Consumers may be equally happy consuming different goods, though they may need to substitute more of one product in place of eac

h unit removed of the other product. The principle that captures this is known as

Business

1 answer:

lawyer [7] · Answer 1 · 2022-02-02T11:12:29+03:00

Answer:

diminishing marginal rates of substitution.

Explanation:

Based on the information provided within the question it can be said that the principle that captures this is known as diminishing marginal rates of substitution. Like mentioned in the question this refers to the fact that a consumer chooses to replace a product instead of actually buying more. This decreases as you move down the indifference curve as shown below.