The Marginal Rate of Technical Substitution Is

question 34

Multiple Choice

The marginal rate of technical substitution is

• A) the market rate of exchange between labor and capital.
• B) the rate at which the firm can substitute labor for capital while holding total cost constant.
• C) the rate at which the firm can substitute labor for capital while holding output constant.
• D) both a and b
• E) both a and c

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Definitions:

Horizontal Merger

The combination of two or more companies that operate in the same industry or produce similar products or services.

Automobile Company

A business that specializes in the manufacturing, design, marketing, or selling of motor vehicles.