why MRS is decline in IC curve

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Why MRS is decline in IC curve

As a guide, the Marginal Rate of Substitution (MRS) is the amount of a good that a consumer is willing to give up for another good while maintaining the same level of satisfaction. When the MRS declines in an Indifference Curve (IC), it means that the consumer is willing to give up fewer units of one good for another good, while their satisfaction remains the same. Below are the reasons why the MRS is declining in an IC curve.

Law of Diminishing Marginal Utility

The Law of Diminishing Marginal Utility states that as a consumer consumes more and more of a particular good, the marginal utility derived from each additional unit of the good decreases. This means that the consumer is willing to give up fewer units of a good for another good as they have already achieved a certain level of satisfaction or utility from the good they have already consumed. This leads to a decline in the MRS in the IC curve.

Substitution Effect

When the price of a particular good decreases, the consumer tends to substitute it for other goods that are relatively more expensive. This means that the consumer is willing to give up fewer units of a relatively cheaper good for another good. This leads to a decline in the MRS in the IC curve.

Income Effect

When the price of a particular good decreases, the consumer's purchasing power increases. This means that the consumer can afford to buy more of all goods, including the relatively more expensive good. This leads to an increase in the consumption of both goods, which leads to a decline in the MRS in the IC curve.

Conclusion

In conclusion, the Marginal Rate of Substitution (MRS) is the amount of a good that a consumer is willing to give up for another good while maintaining the same level of satisfaction. The MRS declines in an Indifference Curve (IC) when the consumer is willing to give up fewer units of one good for another good, while their satisfaction remains the same. This happens due to the Law of Diminishing Marginal Utility, Substitution Effect, and Income Effect.

Answer

Well MRS decline continuously in IC curve because of law of diminishing marginal utility.Means when the consumer consumes more and more of  good 1 then his marginal utility from another good keeps on declining  and he is willing to give up less and less of good 2 for each good 1. Thats why MRS decline in IC curve.

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because our resources are fixed and we can't produce 2 goods at same time .for increase of good1 we decrease the good2

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Because consumer needs to sacrifice goodX for consuming more of goodY

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MRS refers to the marginal rate of substitution. MRS will always decline in IC because if we want to get additional unit of a commodity X we have to sacrifice some unit of commodity Y.  Hence MRS of commodity declines...

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Because of operation of law of  diminishing marginal utility

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because of LAW OF DIMINISHING MARGINAL UTILITY

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Coz of diminishing marginal utility

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