How the technical rate of substitution and marginal product are related and what is their difference?
i only wrote their definitions
The technical rate of substitution measures the rate which the firm has to substitute one input for another, for keeping the output stable. It is also the slope of isoquant.
Marginal product is when we need more of factor one but the same time keeping the factor two fixed.
The technical rate of substitution (TRS) and marginal product are related concepts in economics that are used to understand the relationship between inputs and outputs in a production process.
The TRS measures how much of one input needs to be substituted for another input while keeping the level of output constant. It tells us the rate at which the factors of production can be substituted for one another without affecting the overall level of production. In other words, it quantifies the trade-off between two inputs in a production process.
On the other hand, marginal product measures the additional output that is produced when one unit of input is added while holding all other inputs constant. It focuses on the change in output resulting from changes in a particular input, without considering the substitution of inputs.
The main difference between the TRS and marginal product is their focus. TRS is concerned with the rate at which factors of production can be substituted, while marginal product focuses on the additional output generated by the addition of a specific input.
To calculate the TRS, you need to determine the ratio of the change in quantity of one input to the change in quantity of another input, while keeping output constant. This can be done by comparing different combinations of inputs and their corresponding output levels.
To calculate the marginal product, you need to observe the change in output resulting from the addition of one unit of input, while holding other inputs constant. This can be done by comparing the output levels before and after the addition of the input.
Overall, both the TRS and marginal product provide insights into the relationship between inputs and outputs in a production process, but they focus on different aspects of that relationship.