Which of the following explains why many small businesses struggle to compete with larger firms?
A.Small businesses are unable to offer the same variety of products that larger firms are able to produce
b. Small businesses are unable to provide the kinds of products that consumers want.
C. Small businesses are unable to sell their goods at the higher prices set by larger firms
D. Small businesses are unable to specialize to the degree that larger firms are able to.
D. Small businesses are unable to specialize to the degree that larger firms are able to.
D. Small businesses are unable to specialize to the degree that larger firms are able to.
To identify the correct answer, let's analyze each option one by one:
A. Small businesses are unable to offer the same variety of products that larger firms are able to produce.
This option suggests that small businesses struggle because they lack the ability to offer a wide range of products like larger firms do. While this may be a challenge for some small businesses, it does not necessarily explain why many struggle to compete with larger firms in general.
B. Small businesses are unable to provide the kinds of products that consumers want.
This option implies that small businesses struggle because they are unable to meet consumer demands and offer products that are desired. While it is true that larger firms often have more resources to conduct market research and produce products based on consumer demand, it is not the only reason why small businesses struggle to compete.
C. Small businesses are unable to sell their goods at the higher prices set by larger firms.
This option presents a possible explanation for why small businesses struggle to compete. Larger firms often have economies of scale, which allow them to produce goods at lower costs and sell them at higher prices. Small businesses may find it challenging to match these prices due to higher production costs or the inability to benefit from economies of scale.
D. Small businesses are unable to specialize to the degree that larger firms are able to.
This option suggests that small businesses struggle because they cannot specialize as much as larger firms. Specialization often allows larger firms to become more efficient and competitive in specific areas. Lack of specialization may hinder small businesses in competing with larger firms that have focused expertise.
In conclusion, option C is the most accurate explanation for why many small businesses struggle to compete with larger firms. The inability to sell goods at higher prices set by larger firms can create barriers for small businesses to gain market share and generate sufficient revenue.