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Jonathan Knee - The Platform Delusion and the Intricacies of Digital and Analog Platforms

Value Investing with Legends

NOTE

Determining Profitable Companies in an Industry

Understanding the importance of fixed cost requirements and minimum efficient scale is crucial in determining the maximum number of profitable companies in an industry. By assessing the gross margin per unit and the fixed cost needed to run the business, one can calculate how many units need to be sold to cover the fixed cost nut and estimate how long it would take a new competitor to break even.

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