Editing X-inefficiency (section)

== Solutions of X-inefficiency ==
'''Government Regulation''' - Rules and regulations set by the government on firms can enhance market efficiency. Studies by Sappington and Stiglitz (1987) show that regulations can address [[market failure]]s such as information asymmetry, externalities and natural monopolies thus reducing x-inefficiency.<ref>{{Cite journal |last1=Sappington |first1=David E. M. |last2=Stiglitz |first2=Joseph E. |date=1987 |title=Privatization, Information and Incentives |jstor=3323510 |journal=Journal of Policy Analysis and Management |volume=6 |issue=4 |pages=567–582 |doi=10.2307/3323510 |s2cid=154531463 |issn=0276-8739}}</ref> Removing  Barriers to entry for new companies can force existing companies to operate more efficiently to stay competitive.<ref name=":3">{{Cite book |last=Baumol |first=William J. |jstor=j.ctt21668j9 |title=The Microtheory of Innovative Entrepreneurship |date=2010 |publisher=Princeton University Press |doi=10.2307/j.ctt21668j9 |isbn=978-0-691-14584-6 |edition=Student}}</ref>  

'''Antitrust Laws -''' The main goal of antitrust laws is to foster competitions and hinder the establishment of monopolies. In their paper, Hovenkamp et al. (2011), examine the function of antitrust laws in advancing economic effectiveness through the deterrence of anti-competitive actions, including but not limited to, price-fixing, bid-rigging, and exclusive dealing.<ref>{{Cite journal |last=Hovenkamp |first=Herbert |title=Antitrust and Platform Monopoly |url=https://www.yalelawjournal.org/pdf/130.Hovenkamp_mawopj7e.pdf |journal=The Yale Law Journal}}</ref> 

Some solutions to X-inefficiency include increasing competition in the market, implementing better management practices, and improving employee motivation and training. Implementing better management practices aid in the reducing x-inefficiency. For example [[lean management]] method concentrate on minimizing waste and increasing efficiency. Technology plays an important role in streamlining processes and lowering labor expense.<ref name=":3" /> 

Another Approach of minimizing x-inefficiency involves Management input. Enhancing employee motivation and training - to help employees acquire the expertise and knowledge for optimal performance, can lower wastage, improve efficiency and productivity. Companies could offer rewards and incentives to employees that bring new innovative manufacturing process aimed at boosting efficiency and reducing waste.<ref name=":3" />