An Example of X-Inefficiency Is

question 119

Multiple Choice

An example of x-inefficiency is

• A) an executive cutting the wages of workers during an economic downtown.
• B) an executive paying a manager a bonus for increasing profits by 20%.
• C) money wasted on TV advertising seen by very few viewers.
• D) an executive, at the corporation's expense, hiring a limousine to drive him one block whenever it is raining.

---

Definitions:

Marginal Revenue

Marginal revenue is the additional income that is generated by selling one more unit of a good or service.

Marginal Cost

The financial outlay for manufacturing an extra unit of a product or service.

Total Revenue

The total amount of money received by a company for goods or services sold, calculated as the quantity sold multiplied by the price per unit.

Total Cost

Total cost is the complete cost of all factors of production used in producing goods or services, including both fixed and variable costs.