MRS full form Marginal Rate of Substitution and MRT full form Marginal Rate of Transformation. Goods are be distributed efficiently in economics when MRS = MRT.

Marginal Rate of Substitution (MRS) term used in economics when we study demand side equation. MRS can be clearly shown in when we study indifference curve.

Where as Marginal Rate of Substitution (MRT) term used in economics when we study supply side equation. MRT clearly shown on graph of production possibility curve.

Marginal Rate of Substitution (MRS)

MRS means a consumer how much willing to pay for goods Q to one unit increased in price of good T. This can be expressed in formula.

Marginal Rate of Substitution

(MRS)= Price of good Q / Price of good T

Marginal Rate of Transformation (MRT)

Marginal rate of transformation means a supplier how much willing to pay for good Q to one unit increased increased supply of good T.

Marginal rate of transformation can be more understand by its formula.

MRT= Good Q / Marginal cost (MC) of good T