B. MRS + mST = MRT Q R. S

Mathematics

1 answer:

babunello [35]2 years ago

8 0

Answer:

MRS is the demand side of equation while MRT is for the supply side.

MRS defines how much a consumer is willing to give up of good X for 1 additional unit of good Y to stay on the same utility level. It is shown by indifference curve. MRS = Price of X/ Price of Y

Similarly, MRT is how much a supplier is willing to give up producing good X for 1 additional unit of good Y. It is shown by Production Possibility Frontier. MRT = MC of X/ MC of Y

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