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marginal rate of technical substitution


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The additional amount of one input required to keep output constant for a small decrease in the quantity of another input, per unit of the decrease. The marginal rate of technical substitution at a particular level of inputs is given by the negative of the gradient of the isoquant. This is the ratio of the marginal products for the two inputs. For a production function F(K, L) the marginal rate of technical substitution between inputs K and L is

Subjects: Economics.


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