The utility function measures a consumer’s preference for goods or services in terms of satisfaction. Learn how to calculate it and why it’s important to economists and businesses.

The MRS, or marginal rate of substitution, represents how easy it is to replace one good with another and retain the same level of consumer satisfaction.

ALAIN CHATEAUNEUF, MICHÈLE COHEN, Risk Seeking with Diminishing Marginal Utility in a Non-Expected Utility Model, Journal of Risk and Uncertainty, Vol. 9, No. 1 (1994), pp. 77-91 ...