X-Efficiency: This is Big for the Sask Party

Wednesday, June 21, 2006

This is Big for the Sask Party

Another big set back for the Saskatchewan Liberals. Norris was a solid candidate for the Liberals in the last provincial election.

Brad Wall is coming strong, and he will be the next Premier of Saskatchewan.

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"A monopolist may be X-inefficient either because it does not have an incentive to be more efficient due to lack of competition or it does not have the opportunity to observe and learn from other more efficient firms in the industry. In an industry high profits may imply high prices due to x-inefficiency. However, excess profits do not necessarily mean that consumers are paying higher prices. And, lack of excess profit does not necessarily indicate competition or cost efficiency." Leibenstein, Harvey. 1966. "Allocative Efficiency vs. 'X-Efficiency'," American Economic Review 56, (June), pp. 392-415