X-Efficiency

The degree of efficiency maintained by companies under situations of imperfect competition. When a corporation is said to be efficient, it means that it is maximizing its outputs from all of its inputs, including worker productivity and production efficiency. Firms are required to be as efficient as possible in order to secure significant profits and continuing existence, in a highly competitive market. This is not true when there is insufficient competition, as when there is a monopoly or a duopoly.