Which of the following is an implication of technological advances for small businesses?

• A. Technological advances can lower production costs and increase efficiency for small businesses.
• B. Technological advances prevent small businesses from entering new markets.
• C. Technological advances eliminate the need for competition among small businesses.
• D. Technological advances always lead to higher prices for small businesses.

Answer: (A)

Verified step by step guidance

1. Understand the role of technological advances in production: Technological advances typically improve the methods of producing goods or services, which can affect costs and efficiency.
2. Analyze how technological advances impact production costs: When technology improves, it often allows businesses to produce the same output with fewer inputs or in less time, effectively lowering production costs.
3. Consider the effect on efficiency: Improved technology can increase efficiency by enabling faster production, better quality, or less waste, which benefits small businesses by making them more competitive.
4. Evaluate the incorrect options: Technological advances do not inherently prevent market entry; in fact, they can lower barriers. They also do not eliminate competition, as businesses still compete on price, quality, and innovation. Lastly, technological advances usually reduce costs, which can lead to lower prices, not higher.
5. Conclude that the correct implication is that technological advances can lower production costs and increase efficiency for small businesses, helping them operate more effectively.