In this example, the raw materials are sold to manufacturers at $$1,$ who then make the goods and sell the item to distributors for $$4,$ who then sell it to retailers for $$5,$ who then sell it to customers for $$8.$

If one of the manufacturers purchases both a distributor and retailer, what type of economic moat will they create?

Below is a supply chain for an industry:

Raw Material Extractors Revenue $$1\mathrm{.}00$

Expenses $$0\mathrm{.}75$

Profit $$0\mathrm{.}25$

Manufacturers Revenue $$4\mathrm{.}00$

Expenses $$1\mathrm{.}00$

Profit $$3\mathrm{.}00$

Distributors Revenue $$5\mathrm{.}00$

Expenses $$4\mathrm{.}00$

Profit $$1\mathrm{.}00$

Retailers Revenue $$8\mathrm{.}00$

Expenses $$5\mathrm{.}00$

Profit $$3\mathrm{.}00$

Retail Profit Margin $37\mathrm{.}5\%$

In this example, the raw materials are sold to manufacturers at $$1,$ who then make the goods and sell the item to distributors for $$4,$ who then sell it to retailers for $$5,$ who then sell it to customers for $$8.$

If one of the manufacturers purchases both a distributor and retailer, what type of economic moat will they create?

They will create Intellectual Property

They will have this Economic Moat over Retailers

They will have this Economic Moat over Raw Material Extractors

They will create a Cost Advantage

They will have this Economic Moat over Distributors

They will create a Switching Cost

They will have this Economic Moat over Manufacturers

They will create a Network Effect