If you have X and you are selling it at Y, and X is in high enough demand & scarce enough, you know you are absolutely, without question, going to realize Z quickly regardless of if you sell it all to one person, or a little to many people.
So here's the question: Do you sell all of X to one person, and risk turning away 10 other potential customers, who may not return to your store in the future because they think you can't keep stuff in stock and/or risk them going to another store in order to acquire X but also purchasing A, B, and C at the other store when they would have bought it at your store if they had been able to buy X (think something like an iPod. I'm probably going to buy things like a car charger and other accessories for it at the store I buy the iPod at)?
or
Do you ration the supply such that 10 people can get what they want, but that 1 person can only get some of what he wants? You'd keep the ten other people happy, and get their additional purchases, but risk losing the business of a potential customer that will tend to buy larger quantities.
It all depends on supply & demand, product (does selling X mean a customer is likely to buy A, B, and C too?), and competition (can a customer easily find a nearby store?).
ETA: My LHBS had to recently ration simcoe and citra hops at 2ozs of each per person. Makes sense for him since there's another LHBS not too far away so if he sold all of his simcoe and citra hops to a couple people, he'd risk many more going to his competition.