Which statement is correct?
A) Monopolist firms tend to be more internally efficient than competitive firms because they have a single goal of profit maximization.
B) Monopolist firms are sheltered from competitive forces and such an environment makes them subject to X-inefficiency.
C) Monopolist firms are in industries with low barriers to entry that tend to lower the cost of producing products.
D) Competitive firms tend to be more efficient than monopolist firms because they maximize per-unit profits, not total profits.

Question

Quizplus · Accepted Answer

Monopolist firms are often subject to X-inefficiency because they are sheltered from competitive pressures, which can lead to less motivation to minimize costs and improve efficiency.

Which Statement Is Correct