Technical Inefficiencies and Profit-Maximization

The theory of production focuses on the quantitative analysis of input/ outputrelations.Based on the economic principle, technical efficiency is considered asa matter of rationality and as a necessary condition for profit-optimization. Dueto this assumption, technically inefficient production alternatives are generally excludedfrom traditional considerations. In contrast, the objective of this paper is todemonstrate that it is not reasonable to focus only on technically efficient productionalternatives in order to maximize profit...