A graphic representation of the ‘gap’a firm shows in its actual and minimum costs of supplying its products. As per the traditional theory of supply, firms always operate on minimum attainable costs. As opposed to this, x-inefficiency suggests that firms typically operate at higher costs than
their minimum attainable costs.
This takes place due to many inefficiencies (such as organising the works, lack of co-ordination, lack of motivation , bureaucratic rigidities, etc.). Large corporates usually face this problem as they lack effective competition which could keep them on their
WORKFARE : Government programmes which make the receipt of unemployment-related benefits (as unemployment allowance) conditional upon participation in some local work scheme.