What is Best explains why a large company can undersell small retailers?

A large company can undersell small retailers primarily due to economies of scale, which allow them to produce goods at a lower cost per unit as their production volume increases. Additionally, larger companies often have greater negotiating power with suppliers, enabling them to secure bulk discounts and lower prices. This financial leverage, combined with more extensive marketing budgets and distribution networks, allows them to offer lower prices that smaller retailers cannot match.