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# X-inefficiency and monopoly question watch

1. How comes a monopolist is X-inefficient?

How can I draw a diagram to show this for a monopolist?
2. Basically because there's no competition there's 0 incentive to cut costs.
This is the correct diagram.
Attached Images

3. (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
4. (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
5. (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?
6. (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.
7. (Original post by BirdIsWord)
Nope.
You probably technically can but I'd just draw the diagram i attached.
Cool. Thanks so much!
8. (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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