Question

A manufacturer produces a container of potato salad using 1 pound of Idaho potatoes, 1 pound of Maine potatoes, or 1 pound of a mixture of the two types of potatoes. Does the marginal rate of technical substitution vary along the isoquant?

Answer 1

Answer:

Yes the marginal rate of technical substitution varies along isoquant.

Explanation:

The marginal rate of technical substitution is the point on isoquant which determines that one point of input can be substituted by one point of another input having no impact on the level of the output. As the labor is used with lesser capital MRTS will decline along the isoquant and will not remain constant.