Final answer:
Warehouse clubs are large retailers that provide a variety of merchandise at low prices through a membership-based model, benefiting from economies of scale.
Step-by-step explanation:
Warehouse clubs are large retailers that offer a limited and irregular assortment of food and general merchandise at low prices to consumers. These clubs usually operate on a membership basis, providing economies of scale that allow for cost efficiency similar to the model used by Amazon in its operations. Amazon, through its network of highly computerized warehouses and use of robots, demonstrates how companies can leverage economies of scale to keep costs low and undercut competitors' prices, despite additional costs like shipping.