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 monopolist's average cost is greater than the minimum possible average cost, indicating that the firm is not producing at the lowest possible cost given the available technology and resources. This can lead to higher prices and reduced output compared to a more efficient market.

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