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

Question

Quizplus · Accepted Answer

Increasing returns to scale are best explained by complementarities, which suggest that when multiple agents coordinate their actions, there is a positive spillover effect on the overall outcome. This means that the more agents that participate, the more efficient and effective the outcome will be.

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