A firm is X-inefficient if it does not minimize costs. A monopoly in an uncompetitive and incontestable market has no current or potential threat to its market power and super-normal profit. Workers and managers will relax more at work and put in less effort because they know the firm will not go bankrupt if they do not minimize costs because profits are high. So the monopoly may be disincentivized to minimize costs, will use its technology inefficiently, squander resources, let costs spiral upwards and become X-inefficient
