Enter the marginal utility of two different products or goods into the calculator to determine the marginal rate of substitution.

## Marginal Rate of Substitution Formula

The following equation is used to calculate a marginal rate of substitution.

MRS = MU_{x} / MU_{y}

- Where MRS is the marginal rate of substitution
- MUx is the marginal utility of good x
- MUy is the marginal utility of good y

## Example

How to calculate marginal rate of substitution?

**First, determine the marginal utility of good X.**Calculate or determine the marginal utility of the first product or good. If you are unsure, navigate to the marginal utility calculator linked above.

**Next, determine the marginal utility of good Y.**Just as in step 1, determine the marginal utility of the other product.

**Finally, calculate the MRS.**Calculate the marginal rate of substitution by using the formula MUx/MUy.

## FAQ

**What is a marginal rate of substitution?**

A marginal rate of substitution is a measure of the amount of a product a consumer is willing to purchase, or consume, with respect to another product. It’s essentially measuring the effect the consumption of one good has on the consumption of a separate but related good.

**What are the limitations of the marginal rate of substitution?**

The greatest limitation is that the MRS can only be used to compare two goods at a time.

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