In the context of buying a business,a known commodity may command a higher price for what reason?

Question

Quizplus · Accepted Answer

A known commodity, or an existing business with established operations and customer base, can command a higher price because the buyer can avoid the start-up costs associated with building a brand new business from scratch. This can include costs such as developing a business plan, market research, hiring and training employees, and establishing a customer base. By purchasing an established business, the buyer can potentially start generating revenue immediately, which adds value and justifies a higher price.

In the Context of Buying a Business,a Known Commodity May