Which type of business entity is referred to as an intermediary?

The correct answer is wholesalers, as they serve as intermediaries in the supply chain between manufacturers and retailers or consumers. Wholesalers purchase large quantities of goods directly from manufacturers, allowing them to take advantage of bulk pricing. They then break these bulk goods into smaller quantities and sell them to retailers or other businesses. This process facilitates the distribution of products, making them available for resale.

Unlike service companies, which primarily provide services rather than products, wholesalers specifically deal with the buying and selling of goods. Retailers engage directly with consumers and focus on the final sales of products, while manufacturers are involved in the production of goods. Therefore, wholesalers are essential intermediaries that enable the flow of products from producers to the market, optimizing the supply chain.