Managers of a firm that is a monopoly hold a one-week executive retreat in Hawaii; however, it would have been cheaper to hold it in Des Moines, Iowa. This is an example of
A) rent-seeking behavior.
B) x-inefficiency.
C) price discrimination.
D) anticompetitive behavior.

Question

Quizplus · Accepted Answer

This is an example of x-inefficiency, which occurs when a firm does not minimize its costs due to a lack of competitive pressure, leading to unnecessary expenses such as an extravagant executive retreat.

Managers of a Firm That Is a Monopoly Hold a One-Week