What is an economic moat? Get the full details.

This term was popularized by Warren Buffet.

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

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

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

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

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

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