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Answer to Question #9132 in Economics of Enterprise for Arpita Ghosh

Question #9132
Given the production function: Q = 100 + P – 0.01P2 + 2N – 0.03N2 Determine the marginal rate of technical substitution
Expert's answer
Marginal Rate of Technical Substitution (or Technical Rate of Substitution) is
the amount by which the quantity of one input (N) has to be reduced when one
extra unit of another input (N2) is used, so that the total output (Q) remains

MRTS = MP(N2)/MP(N) = -0.03/2= -0.015 – MRTS for the input N
for N2

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