Diminishing Marginal Rate of Substitution
The principle of diminishing marginal rate of substitution (MRS) posits that as an individual has more of one good relative to another, their willingness to trade away a unit of the scarcer good for an additional unit of the abundant good decreases. This phenomenon is a direct result of diminishing marginal utility; as the quantity of a good increases, the extra satisfaction (marginal utility) gained from one more unit falls. Consequently, the individual values the abundant good less at the margin, leading to a lower MRS and flatter indifference curves. This characteristic is what gives indifference curves their typical convex shape.
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