Home > Term: X-efficiency
X-efficiency
Producing output at the minimum possible cost. This is not enough to ensure the best sort of economic efficiency, which maximizes society’s total consumer plus producer surplus, because the quantity of output produced may not be ideal. For instance, a monopoly can be an X-efficient producer, but in order to maximize its profit it may produce a different quantity of output than there would be in a surplus-maximizing market with perfect competition.
- Part of Speech: noun
- Industry/Domain: Economy
- Category: Economics
- Company: The Economist
0
Creator
- summer.l
- 100% positive feedback