Question

Does substitution efficiency imply input efficiency?

Answer 1

Substitution efficiency is achieved while substituting one good for another due to change in price, but input efficiency is achieved, when the maximum possible output for a given input is achieved. Substitution efficiency is achieved when more of the substitution cannot be done without increasing the losses. So, the objectives of substitution efficiency and input efficiency are different. It means that substitution efficiency does not mean to be input efficiency.