Possible reasons for X-inefficiency include the following, except
A) managers having other goals besides maximizing profits.
B) workers being poorly motivated or poorly supervised.
C) costs of materials rising due to tight supply conditions.
D) the firm being lethargic due to the absence of competition.

Question

Quizplus · Accepted Answer

X-inefficiency refers to the unnecessary costs and inefficiencies within a firm that result from a lack of competition or other external pressures. The options A, B, and D all suggest internal factors that could contribute to X-inefficiency, such as management priorities, worker motivation, or market conditions. However, option C suggests an external factor – a tight supply of materials – that could lead to higher costs for the firm, but is not typically associated with X-inefficiency specifically.

Possible Reasons for X-Inefficiency Include the Following, Except