When the wholesaler takes large shipments and breaks them down for direct resale to the consumer, what does it eliminate?
(1 point)
• Eliminates the retailer and extra costs for the consumer
• Eliminates all profits and taxes
• Eliminates the consumer and the manufacturer
• Eliminates the manufacturer
• Eliminates the retailer and extra costs for the consumer
When the wholesaler takes large shipments and breaks them down for direct resale to the consumer, it eliminates the retailer and extra costs for the consumer.
When the wholesaler takes large shipments and breaks them down for direct resale to the consumer, it eliminates the retailer and extra costs for the consumer.
To understand why this is the correct answer, let's break down the options:
1. Eliminates the retailer and extra costs for the consumer: This means that the middleman, which is the retailer, is eliminated from the supply chain. By doing so, the consumer can buy the products directly from the wholesaler, bypassing the additional costs that would have been added by the retailer. This benefits the consumer by potentially saving them money since they don't have to pay the markup added by the retailer.
2. Eliminates all profits and taxes: While removing the retailer in this scenario might reduce profit for the retailer, it does not eliminate all profits and taxes. The wholesaler and manufacturer still make profits from the sale of goods, and consumers still have to pay applicable taxes.
3. Eliminates the consumer and the manufacturer: This option is incorrect because it does not align with the situation described. The business model described involves the wholesaler directly selling to the consumer, thus still involving both the consumer and the manufacturer.
Therefore, the correct answer is that when the wholesaler takes large shipments and breaks them down for direct resale to the consumer, it eliminates the retailer and extra costs for the consumer.