To assess that question, we need to understand the implications of profit maximization. Profit Profit is defined as revenue minus cost. However, we need to be a little careful in interpreting that. The proprietor is ignoring the opportunity cost of her own labor. Production Function Firms earn profits by selling goods and services, which in turn are outputs.
Production is the transformation of inputs into outputs.
The transformation of inputs into outputs is determined by the technology in use. Limited quantities of inputs will yield only limited quantities of outputs. A key distinction here is between the short and long run. Some inputs can be varied flexibly in a relatively short period of time. Other inputs require a commitment over a longer period of time.