Question

How would you respond to this post?

According to Douglas, the marginal rate of substitution describes the relationship between product interoperability a consumer accepts without any loss (Douglas, 2012). In other words, MRS explains how much of one product is required to replace another product. For example, a runner may typically rely on Gatorade for their post-run recovery, but they can substitute 1 Gatorade with 1.5 coconut waters and still get the same nutrients and enjoyment. However, as time goes on, they may get sick of the taste of coconut water, so the enjoyment level goes down; therefore, they are less willing to substitute coconut water for Gatorade. As the runner drinks more of one product, they gain less enjoyment per container than the previous one. Combining this diminution with the fact that the total utility must not change makes graphs of the marginal utility of two products convex curves (Douglas, 2012). Douglas calls the chart of this phenomenon an indifference curve (Douglas, 2012).

I used a runner in the previous example because I am a runner. Some weeks I spend up to ten hours of running. While running, I listen to audiobooks or music. On a shorter run, one chapter of an audiobook can replace one album of music, or vice-versa. However, while running a marathon, I spend four and a half hours running, and both music and audiobooks can get annoying if not substituted. During this run, we can say that I would be willing to listen to four albums of music and four chapters of an audiobook. However, the ratio is a curve, as described by Douglas earlier, so if I had to listen to five albums of music, then I would have to listen to three and a half chapters to gain the same enjoyment. The ratio changes because as I add more music, I gain less satisfaction from each album when compared to the previous one.

Answer 1

Response :

The above article attempts to explain the concept of Marginal Utility Of Substitution , for providing a vivid understanding about it. The article advocates that the degree to which the two products can be exchangeable shows the relationship between the consumption pattern of two which is acceptable to a consumer. The article reflects on the concept through holding that it is the amount or quantity of a product that consumer needs to replace it for another. The concept is well demonstrated through n example in which a runner can substitute a Gatorade with coconut water but only up to a limited period after which the enjoyment and satisfaction from drinking coconut water slowly decreases and finally diminishes leading to formation of an indifference curve. This example increases the understanding about the concept.

The example of changing of preferences while taking long runs is also apt for describing the concept in a more detailed manner through reflecting on how the satisfaction level decreases which creates the need for substitution of the product.

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