In this short revision topic video, we look at the concept of X-inefficiency.
Typically we use the term x-inefficiency when analysing costs in imperfectly competitive markets such as monopoly, duopoly and oligopoly.
X-inefficiency happens when a lack of effective competition in an industry means that average costs are higher than they would be if the market was more contestable.
This leads to a loss of technical / productive efficiency.
Root causes of X-inefficiency
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