What is an economic moat? Get the full details.

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This term was popularized by Warren Buffet.

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It mainly refers to a business's ability to maintain competitive advantage over its rivals to protect its long run profits.

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Low prices lead to an increase in the number of customers buying your product.

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Cost advantage, size advantage, high switching cost, intangibles are some ways to create an economic moat.

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The analogy relates to the moats, that would surround mediaeval castles and act as a barrier of protection.

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Good competition is an essential factor that allow a company to provide a good service.

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