ABSTRACT
LEIBENSTEIN’s concept of efficiency that re-
jects the technical efficiency notion of profit
maximizing and costminimizing.He argued
that individual workers are free to choose
their effort level and interpret their own
jobs. The equilibriumposition for a firmwill
be when every individual is in his or her
‘inert area’, an effort point which, if moved
away from, would reduce utility. This level
of ‘efficiency’ and associated cost is com-
fortable for a firm’s individuals. Prices are
fixed using conventional formulae.
