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  • ICAR and TNAU E-Course Summarized

    Summarized Notes
  • If the marginal rate of substitution (Δy₁/Δy₂ or Δy₂/Δy₁) is equal to zero, then the enterprise relation is said to be

    Question: If the marginal rate of substitution (Δy₁/Δy₂ or Δy₂/Δy₁) is equal to zero, then the enterprise relation is said to be

    Options:

    Competitive
    Supplementary
    Complementary
    None

    ✅ Explanation: The marginal rate of substitution (MRS) measures the rate at which a consumer is willing to substitute one good for another while maintaining the same level of satisfaction. If the MRS is zero, it means that the consumer is not willing to substitute one good for another at all, indicating that the goods are supplementary. Supplementary goods are those that are consumed together, such as bread and butter.  
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