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7 July, 06:08

Why Marginal Rate of Substitution must equal to the ratio of price of 2 given goods for the consumer to achieve maximum satisfaction?

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  1. 7 July, 07:16
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    Marginal Rate of Substitution must equal to the ratio of price of 2 given goods for the consumer to achieve maximum satisfaction because when rate of substitution is completely different form the ratio prices, the index of benefits which is produced by the goods is different from relative costs as well.
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