MARGINAL RATE OF SUBSTITUTION
Measurement on the amount of a commodity a consumer will give up to get another good, as long as the level of satisfaction remains the same. The Marginal Rate of Substitution (MRS) is used in indifference theory in order to examine consumer behavior. MRS is computed between two commodities in an indifference curve that shows the margin of equal utility, for every combination of ‘Commodity A’ and ‘Commodity B’. It is always changing for a given point on the curve, reflecting the slope of the curve at that point.
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