- Words: 1626
- Length: 5 Pages
- Topic: Economics
- Paper #: 68308100
The lack of incentives or competitive pressures may lead monopolistic firms to neglect minimizing unit costs of production, i.e., to tolerate "X-inefficiency" (phrase coined by H. Leibenstein). Included in X- inefficiency are wasteful expenditures such as maintenance of excess capacity, luxurious executive benefits, political lobbying seeking protection and favourable regulations, and litigation" (Khemani and Shapiro, 1993).
In all, monopoly is the economic state in which a single company produces a