Economic Moat

What does it mean?
A figurative term that Warren Buffett coined to refer to the competitive advantage one company has over other companies in the industry.

In Other Words...
The wider the moat, the larger and more sustainable the competitive advantage. By having a well-known brand name, pricing power, and a large portion of market demand, a company with a wide moat possesses characteristics that are barriers against other companies wanting to enter into the industry.

Related Links
Economics Basics Tutorial - Learn economics principles such as the relationship of supply and demand, elasticity, utility, and more!

Related Terms
Absolute Advantage | Comparative Advantage | Dismal Science | Economics | Economies of Scale | Warren Buffett

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