Question

why can whole salers afford to sell goods at rates that are lower than those offered by retailers​

Answer 1

Answer:

The most basic reason is transactional cost will be low when things are bought in a wholesale quantity.

Ex - As a distributor, if party A buys 100 qty per week, then every time there will be some order cost, admin cost and transportation cost.  

On the other hand, if party B agrees to buy 1000 qty (equivalent to 10 weeks of order of party A) in a single order, there will be only one time order cost (as compared to 10 order cost of party A) and also one time transportation and other admin costs. In return of this huge order, party B would also expect discount (known as quantity discount)

Explanation:

Hope it's helpful.

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