Difference between revisions of "Profit"
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*Normal Profit - a firm is making normal profit when it makes enough revenue to just cover its day-to-day operating costs. Therefore, it is sometimes viewed as a cost. | *Normal Profit - a firm is making normal profit when it makes enough revenue to just cover its day-to-day operating costs. Therefore, it is sometimes viewed as a cost. | ||
| − | [[ | + | ==Short-term profit== |
| − | [[ | + | * There is nothing easier to do than boost profits in the short term. All a manager has to do is cut any expense related to the long term: training, maintenance, purchase of new capital, etc. [http://www.endsoftheearth.com/Deming14Pts.htm] |
| + | |||
| + | ==See also== | ||
| + | *[[Profit maximization]] | ||
| + | |||
| + | [[Category:Accounting]] | ||
| + | [[Category:Economics]] | ||
Latest revision as of 16:50, June 28, 2016
Profit is the excess of total revenue over total cost for a business. Alternatively, it is the return to anyone or anything that engages in an entrepreneurial activity.
There are different forms of profit in economics:
- Economic Profit - achieved when the Total Cost (TC) subtracted from Total Revenue (TR) yields a positive gain.
- Normal Profit - a firm is making normal profit when it makes enough revenue to just cover its day-to-day operating costs. Therefore, it is sometimes viewed as a cost.
Short-term profit
- There is nothing easier to do than boost profits in the short term. All a manager has to do is cut any expense related to the long term: training, maintenance, purchase of new capital, etc. [1]