In the coordination failure model,increasing returns to scale are best explained by strategic
A) mismanagement.
B) complementarities.
C) substitutabilities.
D) collusion.
E) government policy making.

Question

Quizplus · Accepted Answer

Increasing returns to scale are best explained by complementarities, where the benefit of one firm's action depends on the actions of other firms. As more firms take action, the benefits for each individual firm increase, leading to increasing returns to scale.

In the Coordination Failure Model,increasing Returns to Scale Are Best