what does the mrts tell you 
the slope of the isoquant or the mrts on the graph shows the rate at which a given input either labor or capital can be substituted for the other while keeping the same output level the mrts is represented by the absolute value of an isoquant s slope at a chosen point a decline in mrts along an isoquant for producing the same level of output is called the diminishing marginal rate of substitution the figure below shows that when a firm moves down from point a to point b and it uses one additional unit of labor the firm can give up 4 units of capital k and yet remains on the same isoquant at point b so the mrts is 4 if the firm hires another unit of labor and moves from point b to c the firm can reduce its use of capital k by 3 units but remains on the same isoquant and the mrts is 3 