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Duke set a deal with the Bonsack Machine Company in 1884. Duke agreed to produce all cigarettes with his two rented Bonsack machines and in return, Bonsack reduced Dukes royalties from $0.30 per thousand to $0.20 per thousand. Duke also hired one of Bonsacks mechanics, resulting in fewer breakdowns of his machines than his competitors. This secret contract resulted in a competitive advantage over Dukes competitors; he was able to lower his prices further than others could

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