X-inefficiency is said to occur when a monopolist's
A)average cost is greater than the minimum possible average cost.
B)marginal costs are greater than the minimum possible average cost.
C)output level is higher than is socially optimal.
D)price is higher than its average cost.

Question

Quizplus · Accepted Answer

X-inefficiency occurs when a firm is not producing at the lowest possible cost, which means its average cost is greater than the minimum possible average cost. This is often associated with lack of competitive pressure in monopolies.

X-Inefficiency Is Said to Occur When a Monopolist's