How do larger firms benefit from managerial economies of scale?

Larger firms benefit from managerial economies of scale primarily because they can employ specialist workers who improve efficiency and reduce costs. As a firm grows, it often separates tasks into specialized roles, allowing employees to focus on specific functions where they can develop expertise. This specialization leads to greater productivity as workers become more skilled in their respective areas, which in turn enhances the overall efficiency of the firm.

Specialist managers can also bring in-depth knowledge and unique skills to various departments, such as marketing, finance, or operations. This division of labor helps the firm to streamline processes, make better strategic decisions, and ultimately reduce operational costs, contributing to the firm's competitive advantage.

Other options, such as hiring fewer employees or accessing more marketing techniques, do not directly describe the benefit of managerial economies of scale. Furthermore, operating in more geographical locations may be a result of growth but does not specifically relate to the efficiency gained through managerial specialization. Thus, the ability to employ specialists is the key factor that illustrates how larger firms leverage managerial economies of scale effectively.