what is the marginal rate of technical substitution mrts 
the marginal rate of technical substitution mrts is an economic theory that illustrates the rate at which one factor must decrease so that the same level of productivity can be maintained when another factor is increased the mrts reflects the give and take between factors such as capital and labor that allow a firm to maintain a constant output mrts differs from the marginal rate of substitution mrs because mrts is focused on producer equilibrium and mrs is focused on consumer equilibrium the formula for the mrts is mrts l k k l mp l mp k where k capital l labor mp marginal products of each input k l amount of capital that can be reduced when labor is increased typically by one unit begin aligned text mrts textit l textit k frac delta k delta l frac text mp l text mp k textbf where k text capital l text labor text mp text marginal products of each input frac delta k delta l text amount of capital that can be reduced text when labor is increased typically by one unit end aligned mrts l k l k mpk mpl where k capitall labormp marginal products of each input l k amount of capital that can be reducedwhen labor is increased typically by one unit 