Which concept plays an important role in the modern theory of production?

MRS

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MRTS

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ISLM

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Transformation curve

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Solution

The correct option is D MRTS
Marginal Rate of Technical Substitution (MRTS) can be defined as keeping constant total output if input 1 have to decrease if input 2 increases by one extra unit.
In other words it shows the relationship between inputs and the trade amongst them.

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