What Is X-Efficiency?

Under imperfect competition, X-efficiency refers to the level of efficiency that enterprises maintain. In this sense, efficiency refers to a company’s ability to get the most out of its resources, such as staff productivity and production efficiency. Firms are compelled to be as efficient as feasible in a highly competitive market in order to secure significant earnings and survival. This is a unique opportunity. This is not true in circumstances when competition is imperfect, such as when a monopoly or duopoly exists.