There is some evidence to suggest that X-inefficiency is:
A. absent whenever two or more producers are competing with one another.
B. not encountered in either competitive or monopolistic firms.
C. more likely to occur in monopolistic firms than in competitive firms.
D. more likely to occur in competitive firms than in monopolistic firms.
Answer: C
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Which of the following situations is NOT possible?
A) SAC and LAC are both increasing for some output levels. B) SAC is increasing but LAC is decreasing for some output levels. C) SAC is decreasing but LAC is increasing for some output levels. D) SAC and LAC are both decreasing for some output levels. E) All of the above are possible.
One of the problems created by price floors set above the equilibrium is:
a. consumers complain about high prices. b. firms don't have incentives to reduce costs. c. the creation of surplus. d. how to cope with the shortages. e. the impact on firm profitability.