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X-inefficiency and monopoly question

How comes a monopolist is X-inefficient?

How can I draw a diagram to show this for a monopolist?
Basically because there's no competition there's 0 incentive to cut costs.
This is the correct diagram.
images.png2.5KB
Original post by BirdIsWord
Basically because there's no competition there's 0 incentive to cut costs.
This is the correct diagram.


I've seen it as a single AC diagram, with the cost level at some random point above the curve in google images, but im a bit confused with its understanding
Original post by AmarPatel98
I've seen it as a single AC diagram, with the cost level at some random point above the curve in google images, but im a bit confused with its understanding


As long as your diagram shows actual cost being higher than minimum cost, its correct.
There are like 4 correct diagrams for it
Original post by BirdIsWord
As long as your diagram shows actual cost being higher than minimum cost, its correct.
There are like 4 correct diagrams for it


Is it possible to show it on a monopoly diagram instead of just a free standing AC curve?
Original post by AmarPatel98
Is it possible to show it on a monopoly diagram instead of just a free standing AC curve?


Nope.
You probably technically can but I'd just draw the diagram i attached.
Original post by BirdIsWord
Nope.
You probably technically can but I'd just draw the diagram i attached.


Cool. Thanks so much!
Original post by BirdIsWord
Basically because there's no competition there's 0 incentive to cut costs.
This is the correct diagram.


I wouldn't say there is zero incentive to cut costs. As cutting costs still leads to increased profit. Rather I would say that the survival of the firm does not depend on cutting costs and therefore it is not a huge priority.

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