What is a common advantage that larger businesses enjoy in financial dealings?

Larger businesses often benefit from financial economies of scale, which refers to the cost advantages that arise when production is increased. As companies grow, they typically have access to more capital, enabling them to negotiate better terms with suppliers, attract lower interest rates for loans, and achieve lower per-unit costs. This occurs because fixed costs such as administration, marketing, and facilities can be spread over a larger output, thereby decreasing the overall cost per unit.

Moreover, larger businesses can leverage their size to secure bulk purchasing discounts and access to financial markets that may not be available to smaller companies. These advantages provide them with a stronger financial position, allowing for more significant investment in innovation and market expansion, ultimately leading to increased competitiveness and profitability.