MARGINAL UTILITY , MRTS ,MARGINAL REVENUE , MARGINAL PRODUCT MARGINAL COST , MPC , MPS

Описание: In this video we'll discuss about all the Marginal Concepts used in economics

As you know in Microeconomics , marginal concepts relate to change in the total. For example, marginal utility is the change in total utility due to a change in the consumption. Marginal revenue is the change in total revenue due to a change in production. So marginal concepts refer to change and finding of a marginal function from a total function is basically a measurement of change. Since the derivative is a tool to measure change, we will see in this video as how derivative is used to derive marginal functions from total functions. The simple rule to be followed is to find any marginal function from it total function, find the first order derivative of the total function.

Marginal Utility: Marginal utility is the addition made to total utility by consuming one more unit of commodity Marginal utility can be measured with the help of derivative

Marginal propensity to consume measures the change in consumption due to a change in income of the consumer.

Marginal propensity to save measures the change in saving due to a change in income of the consumer

Marginal product of a factor of production refers to addition to total product due to the use of an additional unit of that factor. The Marginal Product of Labour (MP L ) or Marginal Physical Product of ) is given by the change in TP due to a one unit change in the quantity of labour used. MP is derived by finding the derivative of the TP.


Marginal Cost (MC) refers to the change in total cost (TC) due to the production of an additional unit of output.

Marginal Revenue (MR) is the change in total revenue (TR) due to the production of an additional unit of output.


Marginal Rate of Substitution 3 (MRS) + 3x 2 y, find the As you have seen in the indifference curve analysis, marginal rate of substitution (MRS) for a consumer consuming two goods X and Y represents the rate at which the consumer is prepared to exchange goods X and Y. Thus for a consumer who uses two goo ds x and y, Marginal Rate of Substitution of x for y (MRSxy) is the amount of good y that the consumer is willing to give up to get one additional unit of good x. MRS is also referred to as RCS (Rate of Commodity Substitution). MRS thus refers to the chan ge in the stock of good y due to a one unit change in the stock of good x


Marginal Rate of Technical Substitution (MRTS) Like MRS in the indifference curve analysis, you have seen MRTS in the iso analysis.quant MRTS represents the amount of one input the producer is willing to give up for obtaining an additional unit of the other input. This exchange or trade off will help the producer to stay on the same isoquant. Thus for a producer who uses two inputs K and L, Marginal Rate of Technical Substitution of L for K (MRTS LK ) is the amount of input K that the producer is willing to give up to get one additional unit of input L .


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