Explain Why X-Inefficiencies Are Often Associated with Lazy Monopolists

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The Answer is Lazy monopolists are those producers that don't make the effort to minimize their costs. They simply try to ensure that enough profits are made to keep stockholders somewhat satisfied. The resulting inefficiency is what economists call X-inefficiency, which occurs when firms operate far less efficiently than they could technically. Although these producers have monopoly power, they don't make large monopoly profits. If there are no threats of competition from outside the industry, lazy monopolists will not be concerned with losing their jobs, and as a result X-inefficiency continues to be present. The less significant is the level of competition, the greater is the degree of laziness, and, therefore, the larger is the X-inefficiency.

Explain Why X-Inefficiencies Are Often Associated with Lazy Monopolists

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Explain Why X-Inefficiencies Are Often Associated with Lazy Monopolists

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