Which economic advantage allows large businesses to afford better technology?

The correct answer is rooted in the concept of Technical Economies of Scale, which refers to the cost advantages that firms experience as they increase their level of production. Larger businesses often have the resources to invest in advanced technology that smaller firms cannot afford. This higher level of investment in technology can lead to significant enhancements in productivity and efficiency.

As businesses grow, they can spread the cost of expensive technology over a larger number of units produced or services offered, reducing the average cost per unit. This allows them to utilize more sophisticated machinery, software, and systems that can improve production processes, reduce waste, and enhance overall output quality. Consequently, large businesses can capitalize on these efficiencies, thereby gaining a competitive edge in the market.

The other options, while relevant to business operations, do not directly address the specific advantage related to affordability of better technology due to an increase in scale. For example, financial leverage focuses on using borrowed funds effectively, operational efficiency pertains to optimizing processes, and strategic investment refers to long-term investments made with the aim of growth or expansion. However, none of these directly explain why larger businesses specifically can afford better technology as a direct result of scaling their operations.