Final answer:
Walmart's transactions with suppliers are highly efficient due to their internal Internet-based system, which reduces operational costs and helps maintain lower retail prices through economies of scale.
Step-by-step explanation:
The transactional efficiency between Walmart and its suppliers is primarily attributed to Walmart's internal Internet-based system with suppliers, which streamlines processes and communication, leading to reduced operation costs. This system allows them to manage inventory effectively, swiftly communicate with suppliers, and streamline their supply chain. By using this technology, Walmart is able to enforce its massive economies of scale, securing lower purchase prices, which in turn enables them to maintain a competitive edge through lower retail prices. Firms, irrespective of their size, determine their pricing and output strategies based on their production model and cost structure with the aim to optimize profits while delivering value to consumers.