Which of the following are two advantages that small businesses typically have over larger companies?

• A. Greater flexibility and closer customer relationships
• B. Lower access to capital and higher economies of scale
• C. More bureaucratic decision-making and higher fixed costs
• D. Wider product variety and global market dominance

Answer: (A)

Verified step by step guidance

1. Step 1: Understand the context of the question, which asks about typical advantages small businesses have compared to larger companies. This involves comparing characteristics such as flexibility, customer relationships, access to capital, economies of scale, decision-making processes, costs, product variety, and market reach.
2. Step 2: Analyze the option 'Greater flexibility and closer customer relationships.' Small businesses often have less rigid structures, allowing them to adapt quickly to changes (greater flexibility). They also tend to interact more directly with customers, fostering stronger relationships.
3. Step 3: Evaluate the other options: 'Lower access to capital and higher economies of scale' is generally a disadvantage for small businesses, as they usually have less access to capital and do not benefit from economies of scale like larger firms do.
4. Step 4: Consider 'More bureaucratic decision-making and higher fixed costs,' which are typically characteristics of larger companies, not small businesses.
5. Step 5: Review 'Wider product variety and global market dominance,' which are advantages usually associated with larger companies due to their resources and scale, not small businesses.