Why does marginal rate of substitution diminish – Microeconomics | Management Notes

Why does marginal rate of substitution diminish?
Cardinal Utility Approach | Microeconomics
Management Notes

Ans) The marginal rate of substitution diminish because of the following reasons:

  • Goods are not perfect substitute for each other.
  • The particular want is satiable.
  • Increase in the quantity of one good does not increase the want satisfying power of the other.

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